Mattioli Woods is a very successful wealth management firm based in Leicester, handling client accounts with a total value exceeding £8.73 billion. The company recently published a pre-tax profit of £9.8 million for the tax year 2017/18 and is planning further acquisitions to expand the company. New offices are expected to open in Edinburgh off the back of these outstanding results. According to Ian Mattioli, the firm’s CEO, just 1.6% of their £58.7 million revenue from the year came from final salary pension transfers. To put that into perspective, roughly £20.8 billion in total was transferred from final salary pensions in the same year across the whole industry.
This, combined with increasingly stringent regulations on the sector, has influenced Mattioli Woods’ decision to stop performing final salary pension transfers from now on.
Why did Mattioli Woods Quit the Final Salary Pension Transfer Sector?
On 4th June 2018, Mattioli Woods suspended its final salary pension transfer advice service pending an internal review into its practises in the area. The Financial Conduct Authority (FCA) was involved in the dialogue that influenced this decision, but the regulator placed no restrictions upon the firm before or following the review.
Restricting independent financial advisers (IFAs) that have been linked to high-risk final salary pension transfers has become common practice for the FCA in recent months. Multiple firms linked to British Steel Pension Scheme transfers, such as Active Wealth and Retirement & Pension Planning Services, have collapsed following stringent FCA restrictions.
The growing insecurity of final salary pension transfers was undoubtedly a contributing factor behind Mattioli Woods’ decision to cease performing the controversial service. Ian Mattioli framed the firm’s decision as sensible business, despite representing a potential revenue loss in the region of hundreds of thousands of pounds:
‘From our perspective, it seems as though transfer values have declined and the FCA has become concerned by trustees leveraging transfer values to lessen their liabilities…Last year, just 1.6% of our revenue came from our DB [final salary] transfer advice service and so we have felt little financial impact by coming out of the market. We have no plans to go back to provide advice in that area.’
This decision comes at a pivotal stage for the final salary pension transfer market, with new regulations and guidance coming into play as of October this year.
Unfortunately, final salary pension transfers still represent a significant source of revenue for opportunistic IFAs and service providers across the UK. These firms continue to risk retributive action from the FCA and additional regulatory organisations, because the initial pay-off remains significant.
Money and Me Claims: Final Salary Pension Transfer Compensation
At Money and Me Claims, we specialise in providing expert support for customers that have been mis-sold financial services or products. We already have significant experience handling final salary pension transfer compensation claims, and are prepared to help you seek redress against firms that have profited from your loss. Many of our clients have also received up to the maximum £50,000 pay-out from the Financial Services Compensation Scheme (FSCS), in instances where culpable firms have gone out of business.
If you would like to read further on the state of final salary pension transfers, read our previous blog post: Are Final Salary Pension Transfers at Risk from a No-Deal Brexit? Or, if you would like to talk to us about your pension compensation claim, please do not hesitate to contact us directly.