Around 370 firms – or roughly 12% of the adviser industry– have left the pension transfer market in the last two years, FCA chief executive Andrew Bailey has revealed.
Speaking this afternoon (4 March) at a Treasury Committee hearing, the Financial Conduct Authority (FCA) chief was quizzed on bad advice given to individuals transferring out of defined benefit (DB) schemes.
Bailey (pictured) admitted he felt the pension freedoms, introduced in April 2015, were introduced too quickly, "and frankly we've been on a catch-up process as a regulator". He later told the room issues surrounding individuals transferring out of DB schemes were not given enough priority in the early days of policymaking.
He then revealed some 370 firms had left the pension transfer market in the past two years, either because the firms or the FCA concluded they were not operating adequately.
"We have a large investigation going on surrounding a large number of other firms where we believe it looks like there was mis-selling," he added.
For approximately two years the FCA has been carrying out an information-gathering campaign on the DB transfer adviser market. It initially spent time targeting firms it felt were carrying out too many transfers, before widening out a questionnaire to all adviser firms that held pension transfer permissions.
Treasury committee member MP Angela Eagle, a former pensions minister, asked the chief executive what would happen to individuals who had been mis-sold, to which he mentioned the Financial Services Compensation Scheme.
Bailey also took questions relating to the Financial Services Register, which has in the past come under fire for being too confusing for consumers and more recently lacking information on advisers when all those who were not senior managers fell off the register in late 2019.
The chief executive admitted upon taking up his position at the FCA in 2016 he did not realise the register would require so much work.
He said: "I had a list of things in my head I thought needed addressing with priority in the FCA when I became chief executive, [and] the register was actually not one of them.
"It hadn't really featured in debate on my time [as a non-executive director] at the board… It's probably the biggest one that took me by surprise in terms of the state it's in versus the state it needs to be. It wasn't on [my list] of things that need tackling."
The incoming directory will be launched in December 2020 and will include public information on individuals who fell off the register as a result of the Senior Managers and Certification Regime, as well as those who will remain on it.
Consumers accessing the directory will be able to check an individual's workplace locations and what business they are qualified to undertake, as well as their regulatory sanctions and prohibitions. There will also be an option to filter by location.
Andrew Bailey will soon take up his new role as governor of the Bank of England. Christopher Woolard, the FCA's executive director of strategy and competition, has been appointed interim FCA chief executive in Bailey's absence.
Advice gap worsened
The pension of the future
Statement released today
Lawyers mulling court action
17 claims against it
Still processing 590 applications
Business travel and quarantine guidelines
It’s The Pro Adviser Podcast
Ahead of International Women's Day
Started the Initiative for Financial Wellbeing