Source · Select Committees · Public Accounts Committee
Recommendation 18
18
The FCA’s response to the BSPS case highlights wider issues within its regulatory approach.
Conclusion
The FCA’s response to the BSPS case highlights wider issues within its regulatory approach. Alongside the estimated 369 firms and advisers that provided unsuitable advice to BSPS members, the FCA found that 17% of DB transfer advice was unsuitable within the wider market. This is a significant proportion of non-compliance, especially when compared to the 4% unsuitability rate for other advice sectors.58 Based on the level of unsuitability found, thousands more consumers are likely to have been mis-sold DB pension transfer advice from 2015–2021 and are due compensation. When we questioned the FCA on its plans to contact and support these consumers, it failed to provide details of its approach and merely stated its general consumer protection duty.59 Confused regulatory expectations
Government Response
Not Addressed
HM Government
Not Addressed
The FCA disagrees with the Committee’s recommendation and does not consider that a review of how it is handling the wider DB transfer market should be undertaken. 6.3 Based on the evidence the FCA holds and the extensive work it has undertaken in this market, the FCA considers the harm associated with BSPS is unique and not replicated elsewhere. Our evidence suggests 46% of BSPS transfer advice was unsuitable compared to 17% in higher-risk firms in non-BSPS pension transfer cases.