DB transfer complaints rise 44% in a year

The number of customer complaints made to the Financial Ombudsman Service (FOS) relating to defined benefit (DB) transfers rose by 44% in 2018/19 in comparison to the previous year, according to research from Duff & Phelps.

The global adviser made a FOI request, and found that the FOS received 798 complaints during the 2018/19 financial year and upheld 39% of cases in favour of the customer. Over the same period in 2017/18, FOS received 553 complaints and upheld 30% of cases in favour of the consumer.

Managing director in Duff & Phelps' compliance and regulatory consulting practice in London, Mark Turner, said: “The number of customers coming forward to raise a complaint with the FOS continues to rise. Since the introduction of pension freedoms, some 69% of individuals were advised to transfer out of their DB pension, according to FCA data.

“Through their review work, the FCA is concerned that unsuitable transfer advice has been and is still being given. The FOI data reveals the FOS is upholding more cases in favour of the customer this year than last, which sends a clear message that the DB transfer market is very much under the eye of the regulator.”

The FCA is responding with plans to ban contingency charging for DB pension transfers in most cases due to the difficulty it could create for advisers with managing conflicts of interest.

The regulator has already proposed the concept of abridged advice, which aims to extend the availability of advice at a low-cost to customers.

Turner added: “The new measures being consulted on by the FCA will hopefully support the provision of independent, quality advice that consumers need. In some cases, a transfer from a DB to DC scheme can be appropriate, but advice must reflect the specific circumstances of each individual.

“There is most certainly an important role for the adviser, and it would be a shame if regulatory changes lead to quality advice becoming harder to get. Expect this to remain an area of focus by consumers and regulators alike for some time.”

    Share Story:

Recent Stories


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.


Helping the credit challenged get mortgage ready
A rising number of borrowers are finding it harder to access mortgages due to being credit challenged - whether that’s from historic debts, a county court judgment, or having little to no credit history.

In the latest episode of the Mortgage Insider podcast, Phil Spencer is joined by Eloise Hall, Head of National Accounts at Kensington Mortgages, and Alastair Douglas, CEO of TotallyMoney.


Inside the world of high net worth lending
The mortgage market continues to evolve, and so too does the answer to the question: what is a high net worth individual in today’s market? In this episode of the Mortgage Insider podcast, host Phil Spencer is joined by Stephen Moroukian, Head of Product and Proposition for Real Estate Financing at Barclays Private Bank, and Islay Robinson, founder and CEO of Enness Global. Together, they explore what brokers really need to know when supporting high net worth individuals.

The future of the bridging industry and the Autumn Budget
MoneyAge content editor, Dan McGrath, is joined by head of marketing at Black & White Bridging, Matt Horton, to discuss the bridging industry, the impact of the Autumn Budget and what the future holds for the sector.