“Today’s consultation paper from the Financial Conduct Authority takes an important step in modernising defined benefit transfer advice. Proposals include removing the starting assumption that a transfer is not suitable at outset and including graphics in comparison reports to make the potential cost of deciding to transfer abundantly clear to consumers.
“The paper appears to recognise that, with pension freedoms now over two years old, the environment is different and the advice process must look at issues on a case by case basis. The detail that may need to be included in any transfer analysis reports will need to reflect this, and in many cases they already provide a significant amount of what the FCA is highlighting should be needed in the future.
“The FCA requirement for advice to be treated as a personal recommendation is welcome. It is what should be taking place at present by determining what is in the client’s best interest. It’s also positive that the paper takes steps to provide greater clarity as to what should be included in that advice process, such as consideration of other financial planning solutions to meet a client’s wider objectives. There will undoubtedly be work needed on some of the detail included in the consultation to deliver the right outcomes for both clients and the industry alike.”