Selectapension suspends new pension transfers on SBS service

A Selectapension spokesperson said: "Following the recent FCA review of our outsource advice partner CFPML, the regulator recommended making some changes to processes which we are currently implementing. Full permissions remain in place while CFPML are working with the regulator on their ongoing review.

"We took the decision to suspend the SBS service for new pension transfer requests so the partner firm could deal with the outstanding backlog and to allow CFPML to update their processes."

A note on its Bureau Services webpage, which offers report writing and financial advice services for pension transfer analyses, says it is "working hard to rectify the situation as quickly as possible and apologise for any inconvenience caused".

Earlier this year, deVere announced that it would be ceasing pension transfer advice amid an FCA review. The FCA launched a Section 166 review into the firm’s pension transfer practices which involves investigating aspects of a regulated firm's activities if it is "concerned or wants further analysis".

In January The FCA issued an alert highlighting its rules surrounding advice on pension transfers, after finding that firms have been advising on pension transfers or switches without considering the assets in which their client’s funds will be invested.

The regulator says it is concerned that consumers receiving this advice "are at risk of transferring into unsuitable investments or – worse – being scammed".

It stressed that a firm advising on a pension transfer should not undertake a comparison using generic assumptions for hypothetical receiving schemes and must take into account the likely expected returns of the assets in which the client’s funds will be invested as well as the specific receiving scheme.

The FCA also reiterated that it is not acceptable for a firm without permissions to outsource the transfer analysis to a pension transfer specialist or to a firm with the permission, and claim to be advising on the pension transfer.

Last month, the regulator published new proposals on advice relating to pension transfers where consumers have safeguarded benefits, primarily for transfers from DB to DC pension schemes.

The proposed changes include requiring transfer advice to be provided as a personal recommendation, and replacing the current transfer value analysis with a comparison to show the value of the benefits being given up.