The Financial Conduct Authority has issued an alert highlighting advice requirements in relation to pension transfers.
The alert stresses how important it is for customers to receive the right advice. That advice needs to take into account their individual circumstances. It also emphasises that it is the responsibility of advising firms to ensure that their clients fully understand the implications of a proposed transfer before deciding whether or not to proceed with a transfer of their pension.
Firms providing advice need to take into account the likely expected returns of the assets to be held within any pension. Advice must be given in relation to any specific aspects of a receiving scheme including any specific risks, costs and charges.
The FCA has published this alert due to concerns that some firms have been advising on pension transfers or switches without considering the assets in which their clients’ funds will be invested. The concern is that customers receiving advice are at risk of transferring into unsuitable schemes or worse, are being scammed.
More information about this alert can be found on the FCA blog.