The FCA has published a paper evaluating the results and lessons from its ban on contingent charging and other remedies in relation to the defined benefit transfer advice market. The FCA put the measures in place in 2020 after finding that many advisers were providing poor advice on DB pension transfers, often driven by conflicts of interest in the remuneration structure. As a result, the FCA put in place a ban on contingent charging that meant advisers were only paid if a client transferred.
The FCA had also found that behavioural biases on the part of advisers contributed to unsuitable recommendations.
The FCA wants to know whether its interventions have had a positive effect, but did not want to go down the very costly (for it and firms) route of measuring the suitability of advice. So it has carried out an analysis of market wide data and concluded that overall its measures did have the intended impact.
It welcomes views on the paper.