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Defined Benefit (Final Salary) Pensions
As highlighted by the FCA’s joint statement, Defined benefit (final salary) pension schemes are a very solid and dependable source of income for retirement and there must be an extremely good reason to transfer this into a riskier type of investment. Getting the right sort of advice on transfer is crucial.
The request follows a joint initiative by the FCA, the Pensions Regulator (TPR) and the Money and Pensions Service (MaPS) to work closely with the Rolls-Royce pension providers in ensuring that members of the scheme tempted to transfer following extensive recent redundancies are not exploited by IFAs.
In a joint statement, the FCA, TPR and MaPS confirmed that:
“All advisers should be clear on the FCA’s expectations when offering advice to members of the scheme. Where the FCA sees unsuitable advice, or bad practice, it will take action…The FCA, TPR and MaPS believe transferring out of a DB pension scheme is unlikely to be in the best interests of most consumers”.
Data Request
Professional Adviser reports that the data request asks the 65 targeted IFAs, since 1 January 2020, how many members of the Rolls-Royce DB pension scheme:
- Have you recommended transferring their Rolls-Royce DB pension scheme benefits?
- Have you recommended not to transfer their Rolls-Royce DB pension scheme benefits?
- Have you facilitated transferring their Rolls-Royce DB pension scheme benefits as an insistent client?
- Opted out of the Rolls-Royce DB pension scheme prior to receiving transfer advice?
- Have commenced your firm’s advice process but have yet to be provided with a recommendation?
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TLW Solicitors’ view on the joint FCA data request
“The issuing of this data request by the FCA would seem to suggest that they have concerns that the advice being received by current and former members of the Rolls-Royce pension scheme may not be suitable. If large numbers of people have been persuaded to leave the scheme then there is unfortunately a good chance that the FCA’s concerns will be realised. Anyone who has been advised to move out of the scheme should seek independent advice on their transfer.”
Get in touch
For those who may have lost out or are concerned about the advice they were given in relation to transferring out of a Rolls-Royce pension scheme, it may be possible to recover compensation for their losses. This could be a claim for compensation through the civil courts for negligent professional advice, or through the Financial Ombudsman Service (FOS), a Government-backed body set up to resolve complaints between FCA-regulated financial businesses and their customers.
Alternatively, where an IFA goes out of business, compensation claims up to the value of £85,000 can still be made through the Government-backed Financial Services Compensation Scheme (FSCS), set up to help victims of failed financial firms. The team at TLW Solicitors has extensive experience in helping clients recover compensation through each of these routes on a “no-win, no-fee” basis.
