Proposed ban on contingent charging to cost advisers £445m

Proposals set out today by the FCA around banning contingent charging for pension transfer advice, particularly for DB to DC transfers, is estimated to result in up to a £445m pa reduction in adviser revenue.

In the FCA’s consultation paper, the regulator said incorporating workplace pensions in advice processes is estimated to cost around £3.2m pa.

In addition, the ban on contingent charging: reduction in unsuitable advice is expected to cost £952m to £1.59bn pa, according to latest figures.

Today’s consultation paper (CP), details measures to change how advisers manage and deliver pension transfer advice, particularly for DB to DC transfers. Concerns have been raised that too many advisers are delivering poor advice, much of it driven by conflicts of interest in the way they are remunerated.

Groups of consumers with certain identifiable circumstances that mean a transfer is likely to be in their best interests will be exempt from the ban on contingent charging. Furthermore, the FCA said it is proposing that where contingent charging is permitted, advisers will have to charge the same amount, in monetary terms, for advice to transfer as they charge when the advice is contingent.

The introduction of a short form of ‘abridged’ advice that can result in a recommendation not to transfer based on a high-level assessment of a client’s circumstances has also been proposed. “This will fall outside the proposed ban on contingent charging and should help maintain initial access to advice,” the FCA said.

    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.


NEW BUILD IN FOCUS - NEW EPISODE OF THE MORTGAGE INSIDER PODCAST, OUT NOW
Figures from the National House-Building Council saw Q1 2025 register a 36% increase in new homes built across the UK compared with the same period last year, representing a striking development for the first-time buyer market. But with the higher cost of building, ongoing planning challenges and new and changing regulations, how sustainable is this growth? And what does it mean for brokers?

The role of the bridging market and technology usage in the industry
Content editor, Dan McGrath, sat down with chief operating officer at Black & White Bridging, Damien Druce, and head of development finance at Empire Global Finance, Pete Williams, to explore the role of the bridging sector, the role of AI across the industry and how the property market has fared in the Labour Government’s first year in office.


Does the North-South divide still exist in the UK housing market?
What do the most expensive parts of the country reveal about shifting demand? And why is the Manchester housing market now outperforming many southern counterparts?



In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance, to explore how regional trends are redefining the UK housing, mortgage and buy-to-let markets.

The new episode of The Mortgage Insider podcast, out now
Regional housing markets now matter more than ever. While London and the Southeast still tend to dominate the headlines from a house price and affordability perspective, much of the growth in rental yields and buyer demand is coming from other parts of the UK.

In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance.