CP19/25 tackles pension transfers – an arcane and troubled topic

A large percentage of customers advised to transfer their pensions from schemes that offer safeguarded benefits should not have done so, the regulator believes. The Financial Conduct Authority’s latest intervention in the provisions governing this highly technical area addresses some recurring problems, says Adam Samuel. However, “The constant fiddling with these rules is not helping to make a complex area work properly.”

Adam SamuelBA LLM DipPFS MCISI FCIArb Certs CII (MP&ER) Barrister and Attorney may be contacted atadamsamuel@aol.com.For links to where you can buy the second edition of ‘Consumer Financial Services Complaints and Compensation’, see www.adamsamuel.com/book.

What is it about pension transfers? CP19/25 proposes yet more changes to the way in which financial advisers recommend or transact such beasts. COBS 19.1, which contains the key rules, has been changed five times since April 2018. The FCA thinks that half of customers advised to transfer their pensions from schemes that offer safeguarded benefits should not have done so. This leaves out the numbers who take this step against the recommendation of their adviser. The regulator is concerned that, according to its 2018 “market-wide data collection”, 69 per cent of the advice given was to transfer.