The Financial Conduct Authority ban on contingent charging on DB pension transfer advice comes into force today.

The regulator announced in June that it would ban most contingent charging on DB pension transfers as part of a raft of measures designed to tackle ‘weaknesses’ in the DB transfer market. 

The regulator said it will continue to allow some contingent charging in cases where it is proved pension savers cannot afford advice otherwise.

The ban came following months of review and study of the often-criticised DB transfer market.

The industry has been split on its response to the regulator’s ban.

Critics, including Former Pensions Minister Steve Web, have said the FCA is reducing access to DB transfer advice at a time when economic hardship from the Coronavirus pandemic could mean more people were considering transfers. 

However, a number of key professional bodies including the Association of British Insurers and the Pensions and Lifetime Savings Association have supported the ban.

In September, Royal London and consultants LCP shared research claiming that nearly half of financial advisers who current offer DB pension transfers may quit the market in the next year partially due to the position of the FCA on transfers.