FCA letter to DB Transfer firms

October / November 2019

The FCA is issuing letters to around 1700 firms that have advised on DB Transfers. The letters are being issued in stages.

The letter is a follow up to the online data submission by firms following the FCA section 165 request. The letter is standard and follows consideration by the FCA of each firm’s:

  • Volume of transfers
  • Conversion rate
  • Insistent client(s)
  • Income from DB business
  • Unauthorised introducers
  • Transfers per Pension Transfer Specialist
  • Expensive solutions

The letter states relevant firm specific data for each of the aspects above and defines action to be taken in respect of each aspect. Firms are required to:

  • Review the feedback and take the actions defined in each section including appropriate mitigation actions;
  • Provide the FCA with a high-level, succinct overview of the actions taken, the results from this and any further action planned. The response for each area of feedback (e.g. volume of transfers, conversion rate etc.) should be no more than 1 side of A4;
  • This summary should be emailed to the FCA when complete.

This action must be done ‘as soon as practicable’ but, in any event, within either one month or two months (varies according to individual firm’s letter) of the date of the FCA’s letter.

If the letter received does not outline any concerns on a particular area, that does not indicate there is no risk arising from the firm’s systems and controls in that area. In reviewing practices and procedures, the firm should ensure that all DB advice requirements are met. 

Important Note: ATEB news is intended to provide general information ONLY. The content, including any views expressed or guidance provided, does not replace the need to comply fully with FCA Rules and Guidance. Unless you have discussed news article content with ATEB, and specifically how it relates to your circumstances, then ATEB disclaims all liability and responsibility and actions arising from any reliance placed upon it. For the avoidance of doubt therefore, any reliance you place on such information without our consultation is at your own risk.

ATEB Compliance offers compliance and regulatory advice.

ATEB Suitability provides report writing software for the financial services market.

Our View

We would emphasise that this is not a trivial tick box’ project. We recommend that firms must give prompt and serious attention to the actions and eventual response to ensure they can demonstrate a robust review of their DB advice processes and controls and implementation of any remedial actions identified by the review.

ATEB has a wealth of Pension Transfer experience and regular contact with the FCA and we are aware of the regulator’s current thinking around transfer advice.

ATEB Consultants can assist firms in implementing the review robustly and drafting the high-level overview response to the FCA.

ATEB has created templates for an action plan and response. Also available is some specific guidance and sample text to aid firms in completing the project. These documents are intended to assist firms in taking and documenting the required action, and summarising the action, outcome and any planned further action for the high-level overview that has to be sent to the FCA within one/two months.

Action Required By You

  • If you receive the letter, deal with it promptly through an appropriate action plan;
  • See ATEB’s Pension Transfer CV HERE.
  • Contact ATEB if you would like any assistance.
SUIT - Beautiful Reports
SUIT - Complete Control
SUIT - Comp confidence
previous arrow
next arrow

About the Author

Technical Manager - Often referred to as the Oracle or the Sage, Alistair has a wealth of financial services experience. He is our go-to Technical Manager and enjoys nothing more than a complicated conundrum. Feel free to test his renowned knowledge by getting in touch.

Contact Us

Brought to you by

Explore more articles in this category

Other articles that you might be interested in