FCA unveils Defined Benefit Advice Tool
The FCA has launched a Defined Benefit Advice Assessment Tool to help advisory firms understand how the regulator checks the suitability of Defined Benefit pension transfer advice.
The tool (known as the DBAAT) is designed to assist firms to check the suitability of pension transfer advice.
The launch follows growing scrutiny by the regulator of pension transfers following concern about the quality and suitability of advice.
The tool can be used to assess advice given before October 2020.
An updated tool that incorporates rule changes that came into force on 1 October 2020 will be published in the coming months, the watchdog says.
The FCA said that it used the tool in the latest phase of its review on the suitability of DB transfer advice.
The tool sets out the key factors to consider when checking the suitability of advice and disclosure.
All firms can access the tool and the watchdog recommend that firms, compliance consultants, auditors, insurers and trade bodies use it to understand how suitability should be assessed.
The FCA says the tool is part of its work to improve the suitability of DB transfer advice.
The FCA said: “We have been conducting intensive supervisory work on DB transfers since 2015 and we have taken action against pension transfer advisers where advice has been unsuitable. We have published rules and draft guidance to improve the quality of DB transfer advice. We will publish Finalised Guidance alongside the updated DBAAT.
“Our work on DB transfers forms a key part of the FCA’s work to reduce harm in the consumer investments market, which we identified as a priority in our 2020/21 Business Plan.”