The Financial Conduct Authority (FCA) has stepped up to address concerns about the high proportion of people in salary-based pension schemes being advised to transfer out of them.
The regulator launched 30 enforcement investigations arising from concerns identified while investigating defined benefit (DB) pension transfers.
It also launched a package of measures, including further support for customers who are considering whether to transfer out of a DB scheme, or who have already transferred out.
Christopher Woolard, interim CEO of the FCA said: “The proportion of customers who have been advised to transfer out of their DB pension is unacceptably high.
“While much of the advice we looked at was suitable, we are still finding too many cases in which transfers were not in the customer’s best interests.”
Woolard hopes the advice the FCA has set out will drive up standards.
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The regulator is to implement a ban on contingent charging, removing conflicts of interest which arise when a financial adviser only gets paid if the transfer goes ahead.
It will also improve conditions for good advisers, who often tell people to stay put, helping them to compete in the marketplace.
The FCA conducted in-depth reviews of the 85 most active firms in the market, identifying companies most likely to be providing unsuitable advice.
The British Steel Pension Scheme (BSPS) was singled out as one with a higher percentage of unsuitable filings than those in the rest of the sample. 192 instances of advice to former BSPS members were reviewed. Of these, 21% appeared to be suitable, 47% appeared to be unsuitable. 32% appeared to contain information gaps.
The Guardian reported that in some circumstances for this scheme, advisers were receiving about £6,000 for each case they convinced to transfer out.