The FCA have issued factsheet (035) providing, as they put it, â€˜a helpful reminder of our position on insistent clientsâ€™
The FCA Handbook does not refer to insistent clients and there are no rules or guidance specifically about how to treat a client who wishes to act against your advice. In practice there may be occasions where your client wishes to take a different course of action from the one you recommend and wants you to facilitate the transaction against your advice. The FCA factsheet reinforces the three step process we had already put in place by our guidance on the document library.
You must provide clear advice that is suitable for the individual client. i.e. follow your normal advice process.
The client would need to contact you preferably in writing explaining that they wish you to act against your advice and why.
You would then write again to the client making it clear that their actions are against your advice and what the risks of the alternative course of action are.
Offering to help a client on an â€˜insistent clientâ€™ basis is entirely optional you may choose that it is something you do not wish be involved with.
As a reminder there are several areas of business where advisers must possess a specialist qualification in order to order to give advice. These are generally speaking Equity Release (ER1 exam or equivalent) Long Term Care (CF8 exam or equivalent Direct Stocks & Shares (see guidance document on Bat for full list) and Occupational Pension Transfers (G60/AF3). We deal with the last below
see our approved suitability reports on pensions
Occupational Pension Transfers â€“ FCA policy statement PS 15/12
Following the FCAâ€™s consultation paper (CP15/7) outlining their proposed changes to pension transfer rules and our own update dated 1st April they have this week released their policy statement (PS15/12) confirming their stance.
The regulator has confirmed that from 5th June 2015 advice on the conversion or transfer of safeguarded benefits into flexible benefits (from Occupational DB or DC schemes) will become a specified activity and will require the advice to be provided by or checked by a Pension Transfer Specialist.
Whilst there is a little ambiguity over the exact definition of â€œsafeguarded benefitsâ€ the regulator has described these as â€œbenefits other than money purchase benefits and cash balance benefitsâ€. They have also confirmed again that the conversion or transfer of benefits that contain GARs should not require the involvement of a Pension Transfer Specialist.
Encouragingly the regulator has now agreed that they see little difference between advising on occupational DC scheme transfers without safeguards and transfers between personal pensions without safeguards and therefore intend to introduce an exception. An adviser must still have the appropriate permissions to advise but there will be no requirement for a Pension Transfer Specialist for advice on DC transfers where there are no safeguarded benefits.