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So, I’ve been having a little skim through the FCA’s latest Policy Statement regarding DB transfers. You might’ve heard about it - I’ve never seen such a buzz on Twitter about an FCA paper (we’ve all been locked up for far too long!) 
 
I won’t go into the detail here; there’s a blog linked below from Apricity that goes into that. Instead, I just wanted to talk about one of the things that most struck me when reading the paper and that’s the inconsistency about how the FCA’s regulation is being applied right now. 
 
Here’s two specific examples of what I mean: 
 
Contingent charging ban 
 
One of the loudest headlines is around the contingent charging ban.* Instead of focusing on whether or not this is the right approach, I instead was most interested in part of the FCA’s justification of it. “Similarly, unless we require all firms to charge for advice… it will be harder for high quality advisers, who will rely in part on income from suitable advice to remain in a DB scheme, if other advisers - who are more likely to recommend a transfer - undercut them by offering supposedly free advice”.
 
Couldn’t this theory be applied much more broadly? What about advisers who always undertake a financial plan, for a fixed fee, at the outset, before making any specific advice recommendations. Are they being disadvantaged by those advisers who only charge at the advice stage? Should all advice therefore be charged by a single fee upfront, for reviewing the client’s circumstances, with advising / implementing coming later? What would that mean for those who could not afford that approach? 
 
British Steel pensions 
 
Another key headline, is the FCA contacting some 7,700 British Steel employees who were advised to transfer out. On this topic, the line of “we will be writing to all these former members to help them revisit the advice they received, and complain if they have concerns” was one that struck me. Again, without going into the rights and wrongs of this quasi-claims’ management approach, what would happen if this was to be applied more broadly? What if, for example, they wrote to everyone advised to invest in a Woodford fund to help them 'revisit the advice they received and complain if they have concerns'…. Along with the many other issues and failings we have seen over the years. 
 
My point is that the lens at which the FCA are looking at Defined Benefit transfers is very inconsistent with the lens they apply to the rest of the industry. And, as in the two examples above, using this angle across all other areas of advice would be nothing short of catastrophic - so why is it ok to use it in this specific category? 
 
As an additional point, not to state the obvious, but this all feels far too late. To bring in these measures now, when there is next to nothing left of this element of advice anyway, will do nothing more than squash the remaining ability for clients to obtain transfer advice - rather than increase the quality of the advice which is the apparent aim. 
 
Hmm... we shall continue to digest the paper and provide guidance to our members across The Verve Group over the coming days. In the meantime, for something a little more light-hearted - did you see the launch party on Monday?! Nearly 900 (eep!) people have watched so far - link below for those who missed it. Today is also the release of a new episode of That Mint Podcast - so that’s your weekend listening sorted ;-) 
 
Have a wonderful weekend all. Mine shall be a (mostly) tame one, following the madness of the last few weeks. Though there are a couple of unopened bottles of fizz lying around the office that are looking at me as I type… 

Cathi

* just a little aside on this. The FCA said that those who opposed the ban “didn’t provide any compelling evidence that an alternative approach would be more effective”. I’m not sure whose job it is to both find alternatives and provide “compelling evidence", or who is deciding what level of evidence is compelling. Seems very much like the decision was made at consultation stage, and that any objections beyond that fell on deaf ears. Which kind of defeats the object of a consultation… 
Wrap your ears around: 
this weeks' episode of That Mint Podcast - 'Going halves on a baby.'
Watch back: 
on Monday's #Project2030 launch party.
Read up: 
on Apricity’s summary of the new FCA Policy Statement.
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