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FCA blasts ‘sleepwalking into another scandal’ accusations

The chief executive of the Financial Conduct Authority has wholly rejected a report from the Work & Pensions Select Committee that said the UK watchdog of “sleepwalking into another mis-selling scandal”.

OMW hits pause on pension transfer service


In a letter to committee chair Frank Field on Thursday, Andrew Bailey strongly criticised the conclusions reached in the report and fought back against claims the FCA was not acting to protect people from defined benefit (DB) pension transfer scams.

He reprimanded the committee for the way it’s report was communicated and for giving the media a copy around 30 minutes prior to the FCA receiving it.

“I was concerned when I saw the cover email from committee staff that went to the media which I felt showed a flippant attitude to these issues, given the seriousness of the allegations the committee was making.”

He added: “I am concerned the committee’s conclusion does not show the full scale of the work we are doing, nor does it factor in the role of other organisations in what is a coordinated exercise.”

International Adviser contacted the Work & Pensions Select Committee to request a response from Frank Field. None was provided prior to this article going live.

Pension protection

The committee’s report followed the recent overhaul of the British Steel Pension Scheme (BSPS), which saw members given the option to move their pots to a new scheme, remain in the old one or transfer to the government’s Pension Protection Fund (PPF).

Bailey reiterated in his letter that there are a number of different types of pensions, and the regulation of these is broadly split between the FCA and The Pensions Regulator (TRP).

There are also other organisations that have roles to play in the pensions landscape, including The Pensions Advisory Service (TPAS), Pension Wise and the PPF, he added.

“Each organisation has a defined remit within which it must act.”

Advice to transfer not always unsuitable

Bailey took the opportunity in his letter to “underline an important point about advice to transfer out of a DB scheme”.

“While the advice to transfer […] is generally unlikely to be in the consumer’s best interests, it will not always be unsuitable for the individual consumer’s circumstances. What is important is that the advice is suitable for the individual consumer’s needs, and this is what we require.”

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