Further wave of DB pension advice clients may get compensation

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Further wave of DB pension advice clients may get compensation

The UK's Financial Conduct Authority has written to a further 950 defined benefit (DB) pension transfer advice customers who could be entitled to compensation from the Financial Services Compensation Scheme, taking the total this year to 3,591.

The FCA said letters have been sent to customers of firms in liquidation where past business reviews have identified unsuitable advice was given to some customers. 

The letters explained to clients they may be entitled to compensation, setting out their options and outlining how they can make a claim to the Financial Services Compensation Scheme.

The DB pension transfer advice market is particularly susceptible to consumer harm and improving this market continues to be a key area of focus for the FCA."

The letters also directed them to the regulator's pension transfer advice checker. This helps them decide whether the received advice was likely suitable, the regulator added.

The FCA has also published a full list of firms currently containing 10, that have moved into insolvent liquidation and have given unsuitable advice to some customers. The list will be kept up to date as work continues, the regulator added.

The watchdog said this was part of its work to support consumers who have received unsuitable DB transfer advice to receive appropriate compensation.

"The DB pension transfer advice market is particularly susceptible to consumer harm and improving this market continues to be a key area of focus for the FCA," it said. "Where harm has been caused, the FCA's aim is to ensure that it is remedied and that consumers receive appropriate compensation."

Improving outcomes for consumers transferring from DB pensions to defined contribution schemes is at the centre of a strategy that sets out a three year plan to better prevent potential harm to investors. The FCA recently published its Consumer Investments Strategy to address this issue.

The regulator said all firms providing DB pension transfer advice should follow the FCA's finalised guidance in order to understand the processes they need to put in place to give suitable advice.

The FCA will continue to monitor the market through regular data collection and its ongoing programme of supervisory work.