Commenting on the  FCA’s latest consultation, including a ban on contingency pricing, Ryan Markham, Head of Member Options, Hymans Robertson, says:

“It is great to see the FCA acknowledging feedback from the wider industry on the pitfalls of contingency pricing.  To ensure members are making fully informed choices that best meet their long term needs, they need absolute transparency on the costs of financial advice and on their receiving products.  This is simply not the case at the moment under the various contingent pricing models out there British Steel case highlights that member outcomes are suffering as a result.   As an industry we need greater confidence in this area and banning pricing structures which result in advisers being paid more for advising members to take a transfer value can only help with this. 

“It is shame, however, that this is only being consulted on now as it will lead to a further delay in confirming the regulatory framework leading to unnecessary uncertainty for members and schemes.  A swift decision and resolution on this is needed to protect members’ benefits.

“While we welcome the proposals outlined in today’s FCA consultation to protect scheme members from unscrupulous advisers, we strongly believe trustees and employers have a moral duty to protect members of DB schemes. They work hard to fund and safeguard the valuable benefits promised to members up to the point of retirement. The number of people choosing to ‘cash in’ their final salary pension has soared. In the past six months we have seen a three-fold increase in requests for transfer values and actual transfers out have quadrupled across our client base compared to pre-April 2015 levels.  By facilitating quality financial advice, trustees and employers can make sure members are able to access good quality advice when they need it, at an affordable cost.  In this way they can also ensure that the pricing for both advice and receiving products is fair and transparent and don’t need to wait for the outcome of the consultation to make sure their members are protected.”