Intelligent Pensions has been told by the FCA to suspend writing DB to DC transfer business with immediate effect.
A note on the FCA register requires the firm to “immediately cease to provide advice in relation to the transfer, or conversion, of safeguarded benefits under a pension scheme to flexible benefits”.
The firm currently has assets under advice in excess of £400m and advises around 1,600 clients on an active basis.
In April 2015 the firm launched a DB pensions transfer service for financial advisers without specialist qualifications to outsource clients considering switching.
The Pensions Regulator estimates that around 80,000 people transferred benefits from DB schemes in 2016, although some of these may be DB to DB switches. The FCA is believed to be considering a review of DB transfer redress procedures, although there have been industry calls for this to be preceded by a review of suitability rules to reflect the increased range of choices offered by DC arrangements introduced by the April 2015 pension freedoms.
Figures from Aon published last month show DB to DC transfer activity increased fifteen-fold since pension freedoms took effect in 2015 where pots over £500,000 are involved, while a third of retirees will take transfers if given advice and clear communications.
A spokesperson for Intelligent Pensions says: “Following discussions with the FCA we have voluntarily agreed to temporarily suspend offering advice and arranging DB transfers.
“We are working with legal and compliance experts and remain confident that our recommendations and advice process deliver good outcomes for our clients and that we will be able to demonstrate this to the FCA quickly.”