FCA warns advisers over incorrect DB redress calculations
Some firms are not considering ongoing fund costs and/or fully allowing for ongoing adviser charges in redress calculations.
"This is a complex area and firms need to take special care, given the potential for consumers not to receive the compensation they deserve."
The FCA has issued warnings to a small number of firms not including all fees and charges in their defined benefit pension advice redress calculations, in line with current guidance.
The regulator says information it has received suggests that some firms are not considering ongoing fund costs and/or fully allowing for ongoing adviser charges in redress calculations. Some of these firms may also be unfairly terminating consumer contracts after consumers make a complaint.
In a statement, the FCA said: "We are looking into these matters and where we identify firms not calculating redress correctly, we will take action using the full range of our powers which may include appointing an independent professional to check calculations and help consumers get the right redress."
While the FCA says it has only seen a small number of firms calculating redress incorrectly, it is reminding all firms undertaking calculations of the importance of allowing for fees and charges correctly.
It has set out further detail to clarify how firms should calculate redress payments in an updated statement on pension transfers redress guidance.
The FCA added: "This is a complex area and firms need to take special care, given the potential for consumers not to receive the compensation they deserve.
"This is particularly important for any firm calculating redress for former British Steel Pension Scheme members, ahead of a decision by the FCA Board on whether to implement a consumer redress scheme."
