The FSA has written to Firms that conduct PPP to PPP / SIPP switches regarding the findings of a recent study that found regulatory shortcomings in the standards of advice offered.
The FSA will be publishing further details of any required action in the near future. In the meantime, the FSA are asking Firms to look at the advice Firms provide to customers to switch their pensions, in order to ensure that the Firm has treated customers fairly in the past and continues to d
The FSA expects that Firms will need to:
consider the approach the Firm has taken in its past pension sales*, and if necessary, look at a sample of individual files on past sales, as well as at the sales processes and systems and controls in this area;
take appropriate remedial action if failings are identified, including providing redress to customers where necessary;
consider whether the Firm should change its approach (including sales processes and systems and controls) to advice and sales going forward; and
consider whether the management information can show whether or not the Firm is delivering fair customer outcomes in this area.
To assist Firms, the FSA will publish a file review template - expect this early in the new year.
* The FSA do not expect Firms to include advice to transfer from an occupational scheme to a SIPP, given prior to April 2007, where the investment held by the SIPP was unregulated (for example, direct holdings in commercial property). Such business undertaken prior to April 2007 is outside scope of FSA Regulation.
