Recent news reports and research from New Model Adviser, has once again highlighted the pension transfer debacle as nine more firms have ceased pension transfer activity, or at the very least have had to limit such transactions.
With the FCA (Financial Conduct Authority) working with customers and businesses to ensure best practice in the financial sector is maintained, it has also had to make some firm decisions when it comes to pension transfer activity and business conduct.
Those affected by FCA restrictions
James Hair Group is just one company that has felt first-hand the rulings of the FCA, after in October last year a restriction was placed on them, stating that they were “not to carry on any business relating to pension transfer or opt out.”
However, James Hair Group believes that these changes occurred as the company was going through a restructure, incorporating James Hair & Co into the Limited Group trading name.
A fairly standard restriction?
The restriction placed on companies like James Hair Group is not uncommon and can often apply to firms who aren’t involved in defined pensions and the transfer activity surrounding these – (which requires advisers to be suitably qualified and experienced in the area, avoiding the issues surrounding misleading information and poor choices made).
For James Hair Group this restriction does not necessarily directly affect their trading as their client base is far from removed when it comes to defined benefit transfers.
The restrictions keep rolling
Back in July 2018, the FCA got involved with Omega Financial Solutions, who were, in turn, requested to stop all of their pension business and investment activity.
It also had the additional stipulation that it must stop acting on behalf of affected customers, contact product providers to cease transfers, switches or any movement of pension funds, with the additional action to speak to customers directly to inform them of this ruling and that no business in these situations can be carried out on their behalf.
Unfortunately, Omega went into liquidation in August 2018 after they also received an asset retention order.
Nectar Wealth, in Northamptonshire, had been informed that they had to limit their pension activity back in June, with activity limited to providing advice regarding transfers or indeed the conversion of benefits from a pension scheme to pension scheme.
While in the same month Radcliffe & Company were requested to “immediately cease to provide advice concerning pensions schemes and the transfer, or conversion, of safeguarded benefit to flexible benefits.”
In May, Hansells Solicitors and Gerard Associates ceased pension transfer activity, while the FCA requested Active Finance (Scotland) and Premier Wealth Managers to stop all regulated pension activity.
In April, Independent Financial Services firm Cowley & Miller’s pension transfers were subject to `independent pre-sale review`. With the company’s entry on the FCA register stating that it must withhold from providing and offering advice on transfers of any kind unless the information is checked by an independent, qualified and experienced the third party first (who the FCA must also approve).
Why all the restrictions?
The FCA is not a disgruntled organisation out to put companies out of business. Quite the contrary. The FCA’s regulations and restrictions are there to protect businesses, advisors as well as consumers.
The volume of complaints regarding pension transfers and the value of compensation claims in this area has increased dramatically over recent years, and something needed and needs to be put in place to regulate the poor advice and misleading activity in this sector.
Money and Me Claims
Money and Me Claims work closely with the FCA following clear and identified guidance and regulations.
All of our advisors are trained and have experience in all aspects of pension and pension transfer claims.
If you want to know about pension transfer claims or if you have any questions, contact us today, we’re happy to help.
Note: Restrictions regarding pension transfers could have been made for business reasons or businesses may have been subject to a voluntary requirement by the FCA.
Reference Video: Chris Land