A review is currently being undertaken, focusing on the suitability of transfer advice. In particular, the regulator has written to over half of the 2,500 firms which have defined benefit permissions (c.1,600 firms) regarding their DB transfers to request additional information from them.
The letter covers defined benefit transfers which were completed between April 2015 – September 2018 (this is the same period as the information request completed earlier in the year) and covers the following themes:
For the majority of firms contacted, they will only be required to respond to one or two of the above as the FCA has tailored their requests for additional information, based upon previous information provided.
In addition to this, we are aware that the FCA is visiting 70-80 firms where they consider there to be a heightened risk to consumers.
Receiving a letter from the FCA is almost always a worrying experience. So, first things first, do not panic and remember you are not alone in receiving these requests.
Once the panic has subsided, you need to:
If you have been requested to provide a copy of your PI certificate, this usually needs providing within a week of the date of the FCA’s letter.
The main response should be completed as soon as possible and no later than either one month or two months (confirmed in the letter) of the date of the FCA’s letter.
The FCA has compared the risks associated with a DB transfer to undergoing a heart transplant!
As such, we recommend that firms who receive this letter review its content and ensure that in their response they can demonstrate that they have undertaken a review of their DB advice in this period and any actions or concerns which have been identified have been resolved.
Apricity has helped several clients respond to these and other FCA requests for information. If you need a hand responding or just want to talk through your response, please get in touch.