Data obtained through a Freedom of Information request showed that since 2018 the Financial Conduct Authority has opened formal investigations into 29 firms and 38 individuals suspected of mis-advising clients to transfer their defined benefit pensions to riskier arrangements.
Around 170,000 transfers took place between April 2015 and September 2018, with a total value of around £83bn, according to FCA analysis. In 2018, it said less than half of the transfer advice it had reviewed had been suitable for clients.
To be clear about this, the FCA’s official regulatory position is that nobody should ever be advised to pull their money out of a final salary pension, like George Osborne said you could in the run-in to the 2015 general elections, because it’s such a terrible deal and only fraudsters would recommend you do it. However, the FCA has only managed to do anything about 67 of 170,000 cases. £83bn has been stripped out of the pensions infrastructure and sent God knows where and, well, that’s too bad.
Although, this is a clue:
Of the 2,426 firms providing transfer advice during the period reviewed by the FCA, 1,454 or 60 per cent of the total had recommended 75 per cent or more of their clients to transfer. At the time, there were more than 6,500 pension transfer specialists working across the market.
Yeah, the financial advisers involved tended to recommend all their clients do it. Because, you know, moving a £83bn pool of capital is going to mean some fees!
The whole story is grossly appalling, from the brute fact that Osborne’s “pensions freedom” dropped just in time for the election – what was Cx, the political chancellor, thinking? two guesses anyone? – to the Lib Dem minister who said on national television that you could spend it on a Porsche if you wanted, all the way to the hustlers working the streets of Port Talbot trying to scare British Steel retirees into cashing out their (excellent) retirement provision by saying the fund was going bust. In fact, it was the activists from South Wales who eventually got the FCA to take what pitifully little action it did.
And as far as I can see this enormous crime has just settled down to mature under a pile of other monstrosities. Also, when I searched for the Cumbo article I got this: an ad for the FCA placed directly next to an ad for cashing out!