Almost 5,000 pension transfers were completed by firms who were later told to exit the market, after the Financial Conduct Authority (FCA) found issues with their advice, it has been revealed.
According to the FCA, 4,659 transfers were arranged by 19 companies which have now ceased pension transfer activities since 2015, a Financial Times report found.
Last month, the FCA issued an update on its investigation into the defined benefit transfer market, which said it was still “very concerned” that too many firms were not providing suitable advice on transfers.
The FCA found less than 50 per cent of the advice it reviewed was suitable, noting that two firms ceased providing transfer advice, while two more altered their business model, following the regulator’s assessments.
Speaking to the Financial Times, the FCA said that where it was found consumers have suffered detriment due to bad advice, it would ensure “appropriate steps are taken", but would not say if it had taken specific action against the 19 firms.
It added that anybody with concerns around their advice should complain to the firm.
Financial Inclusion Centre co-director, Mick McAteer, told the paper: “The FCA should be requiring these businesses, where it had the most serious concerns, to write to their customers to alert them about the FCA’s involvement.
“This is such a serious issue because the potential impact on an individual of being wrongly advised to transfer their DB pension is much greater than being mis-sold PPI or an endowment, because of the huge sums involved.”
McAteer added that the regulator should be pulling out all the stops to ensure people who could be affected are aware of their right to make a complaint.