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ombudsman news

issue 146

November 2018

thinking ahead

Retirement involves some of the most difficult choices people will ever make. At the same time as adjusting to giving up work, they need to look ahead to the type of life they’d like – and can realistically afford – in the next 20 or 30 years. And at the moment – as headlines report a rising state pension age, trouble at major pension schemes and the risk of scams – it might feel like a particularly worrying time for people making decisions about their future.

As Andrew Bailey, chief executive of the FCA, has pointed out, the responsibility for these decisions has shifted increasingly to individuals over the years – and it’s essential that people are given the help they need to reach the right answers. And since the introduction of pension freedoms in 2015, the issue of people accessing their pension pots more flexibly – transferring from often valuable “defined benefit” (DB) schemes to “defined contribution” (DC) ones – has been one of the most hotly-debated topics among financial advisers.

To put things into context, less than 2% of the complaints we received in the last financial year were about pensions, and DB to DC transfers represent just a fraction of our overall work. However, pensions account for a significant proportion of the complaints we receive about advisers. And given the sums of money involved in these transfers, it’s understandable that advisers want to understand what they should do to prevent problems – and complaints – arising in the future.

These concerns are consistently raised with me at our roundtable events – whether we’re in Brighton or Stirling. And yet, after lots of discussion about good practice, there’s generally consensus that a tick-box approach to compliance isn’t the right one. The FCA has now set out the next steps in improving pensions advice. As ever, the challenge for advisers isn’t just to know the rules, but to apply them to real lives – understanding where people have come from, their hopes for the future, and what really matters to them.

In this ombudsman news, Steve Webb calls for clarity about the standards to which advisers will be held if a customer raises concerns with us. Throughout this edition, we’ve aimed to provide that clarity – illustrating some of the complaints we’ve seen about pension transfers, how we’ve looked into what’s happened, and why we’ve reached the decisions we have. We’ve also brought together some key voices in the pensions landscape, who’ve given their views on how things stand and what they see as the challenges ahead.

We’re always open to feedback about what more we can do to support advisers in preventing complaints. The good news is that most financial advisers I meet – and indeed most financial advisers – haven’t ever had a customer contact us. The better the conversations we have – both about past mistakes, and also about the future – the more likely it is that things will stay that way.

Caroline Wayman

Image: Caroline Wayman: 
chief ombudsman
Caroline Wayman
chief ombudsman

ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.