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Just 11 FCA investigations into DB transfer misconduct in 2020

Despite a 26% increase in consumer complaints against firms


UK financial regulator investigations into the defined benefit (DB) pension transfer market have decreased rapidly over the last three years, according to a freedom of information (FOI) request by consultancy firm Duff & Phelps.

Data obtained by the FOI from the Financial Conduct Authority (FCA) confirmed that four investigations into firms and seven investigations into individuals suspected of DB transfer advice misconduct have been opened by the watchdog in 2020 so far.

This number dropped to a total of 10 cases opened in 2019, four against firms and six against individuals, while in 2018, a total of 46 cases were opened by the FCA—21 against firms and 25 against individuals.

As of June 2020, there were 1,965 firms licensed to provide DB transfer advice.


Duff & Phelps also obtained data in a FOI request to the Financial Ombudsman Service (Fos).

It found that consumer complaints against firms for misadvised DB transfers rose to 554 in 2019 from 441 in 2018, a 26% increase.

Complaints for 2020 currently stand at 504 for the period between January and August 2020 and are likely to surpass those recorded in 2019.

The data also shows that year-on-year, slightly fewer complaints are being upheld in favour of the customer—46% in 2018, 41% in 2019 and 40% in 2020—with 203, 227 and 202 complaints upheld, respectively.

‘Stay vigilant’

Mark Turner, managing director in Duff & Phelps’ compliance and regulatory consulting practice, said: “In June this year, the FCA banned contingent charging for advisers offering DB transfer advice, which was a significant step towards tightening regulation of the industry.

“The FCA’s decision to go ahead with this ban is part of a broader agenda of them taking decisive action where markets are not seen as supporting the best interests of consumers.

“Now is an important time for regulators, advisers and consumers to stay vigilant. As the initial shock of covid-19 begins to plateau, regulators have already begun to refocus their attention to issues and concerns which might have taken a backseat in recent months—and defined benefit transfers will return to the forefront as a key area for scrutiny in the following months and years.”

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