FCA contingent charging ban dubbed 'draconian'

Reducing amount of financial advice

clock • 6 min read

Some advisers have described the Financial Conduct Authority’s (FCA) ban on contingent charging for defined benefit (DB) transfers as a ‘draconian’ measure that could lead to less advice being given to those who need it.

The FCA on Friday (June 5) banned the use of contingent charging in DB advice, except under certain circumstances. The new rules come into place on 1 October.  The ban has been expected since the FCA's consultation on pension transfers in October 2018 and is designed to stamp out conflicts of interest that arise when advisers only get paid if transfers go ahead. The FCA's exceptions to the ruling include clients who may be not be able to afford non-contingent advice charges and are more likely to benefit from receiving advice. The regulator will also implement proposals allowing ad...

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