Over 3,500 DB advice clients receive letter about compensation

Market is ‘particularly susceptible to consumer harm’ and improving it is ‘a key area of focus’ for FCA

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The Financial Conduct Authority (FCA) has continued its campaign to contact Brits who received defined benefit (DB) pension transfer advice to inform them that they may be entitled to compensation.

According to an update on its website on 18 October 2021, the regulator has written to a further 950 customers about potential reimbursement.

Since the start of 2021, the UK watchdog has sent letters to a total of 3,591 defined DB pension transfer advice clients.

Details

The FCA sent letters to customers of firms in liquidation where past business reviews have identified that the companies had given unsuitable advice to some of them.

The letters explain to clients that they may be entitled to compensation, setting out their options and outlining how they can make a claim to the Financial Services Compensation Scheme (FSCS). They also direct customers to the FCA’s DB pension transfer advice checker to help them decide whether the advice they received was suitable or not.

The watchdog has also published a full list of firms that are insolvent or in liquidation and have given unsuitable advice to some customers. This currently covers 10 firms and will be kept up to date as the FCA continues its investigations.

Long-term plan

This latest letter-writing campaign is part of the FCA’s work to support consumers who have received unsuitable DB transfer advice to receive appropriate compensation.

The regulator said that the DB pension transfer advice market is “particularly susceptible to consumer harm and improving this market continues to be a key area of focus”.

“Where harm has been caused, the FCA’s aim is to ensure that it is remedied and that consumers receive appropriate compensation”, it added.

The financial watchdog recently published its consumer investments strategy, which set out a three-year plan to address potential harm to investors. Improving outcomes for consumers transferring from DB pensions to defined contribution (DC) schemes is at the centre of that strategy.

The UK watchdog added that it “will continue to monitor this market through regular data collection and its ongoing programme of supervisory work”.

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