Pension Transfer Advice Consultation Paper 19-25 – part two

This is part two of our discussion on the Pension Transfer Advice Consultation Paper 19-25 – catch up on part one here. In this part, we’re looking at the Workplace Pension Scheme & Ongoing Charging and as well as what you need to do now.

Workplace Pension Scheme & Ongoing Charging

The FCA has also proposed that prior to recommending any external transfer, you should first consider if the client can transfer into their Workplace Scheme (WPS). If this rule is brought in, you will no longer be able to discount this option because there were inadequate fund choices or that you are not able to offer ongoing advice.

As part of this you will also have to compare the costs and charges in a WPS against where the client already is and another DC scheme, there is an example below:

Pension Transfer Advice Consultation Paper 19-25 – part two

Where a client is concerned about costs, the WPS will usually always be the cheapest but this does not mean that a transfer into the WPS will be the best choice for the client. The only way to know what is best for the client is to assess suitability at the outset and then review this on an ongoing basis.

New Retail Mediation Activities Return or RMAR Reporting

The DB changes which were introduced earlier in the year had a wide-reaching impact on firms’ PII cover. The FCA will now require you to report to it (via RMA-E) on a 6 monthly basis what your PII cover is and how much it is costing you. In the long term, this will hopefully help the FCA understand that the changes it makes to regulations can have a major monetary impact on firms.

RMA-M will also be introduced to monitor the number of clients that firms advise to transfer and the charging structure firms use. This will be completed on a six-monthly basis too.

What you should do now

Through this consultation paper, the FCA hopes to get the following:

  • An understanding of the impact which banning contingent charging will have
  • The industries thoughts on the implementation of abridged advice
  • An understanding of the industries thoughts on banning contingent charging
  • An understanding of the PII impact

At a time when PI Insurance costs for pension transfers have skyrocketed, potential FOS redress payments have increased exponentially these changes might be a change too far for some firms.

If you have any comments or suggestions about any of these proposals, the discussions for the consultation paper are open until the 30th October 2019. So, get them in by this date!

To do this you can:

  • Complete the online form.
  • Email –
  • Or you can write to – Sandra Graham and David Berenbaum, Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN.

They will consider the feedback they are given and publish the Policy Statement in Quarter 1 2020, although they have indicated that if the ban on contingent charging is agreed, it can take effect within a week, meaning it could happen as soon as November this year.