Our statement on consultation paper CP 19/25

7 August 2019
Following the consultation paper CP19/25 released by the FCA on Tuesday 30 July 2019, the advice provided on defined benefits pension transfers looks set for a new wave of scrutiny by the regulator.

The key takeaways from this document include a potential ban on contingent charging, concerns over high ongoing adviser & product charges, and issues around the clarity and disclosure of charges and other key information.

We remain of the belief that transferring a DB pension will continue to be the right answer for some scheme members, and to that end we feel consumers continuing to have access to affordable advice is of paramount importance. Royal London will continue to work with relevant groups to campaign for a statutory right to partial transfers, and for advice fees to be payable from DB schemes.

In addition we will maintain our ongoing relationship with PI insurers to gauge their appetite to continue in this market, and work with them to encourage them to do so. Advisers’ ability to secure affordable PI cover is essential for the ongoing sustainability of the pension transfer advice market. To compliment this, Royal London will continue to ensure high quality CPD material, specific to pension transfers, is available to Pension Transfer Specialists to further improve the quality of advice.

In upcoming editions of the Royal London adviser newsletter we will explore issues raised in the consultation paper in more detail. Through this we hope to enhance advisers understanding of the regulator’s concerns and enable them to provide advice in a compliant and cost effective manner.

Commenting on CP19/25, Isobel Langton, CEO of Royal London intermediary said: 

Royal London is conscious of the significant challenges and potential risks associated with the Defined Benefit market. However members of Defined Benefit schemes have a legal right to transfer and in some circumstances opting for a transfer will be good advice. The best way to ensure that the market works well for these members is to ensure that they have access to high quality impartial advice and high quality product solutions on commercial terms that make sense for advisers, providers but most important of all members. This is not always the case today and it is right that FCA are actively involved in re-defining the framework within which the market works. Royal London will work with key market stakeholders, including advisers, professional bodies, PI providers and FCA, to improve the way the market is working.

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The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.