We have recently received information about a small number of firms not including all fees and charges in their defined benefit pension advice redress calculations, in line with current guidance FG17/9.
The information suggests these 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.
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 we have only seen a small number of firms calculating redress incorrectly, we remind all firms undertaking calculations of the importance of allowing for fees and charges correctly. We have set out further detail to clarify how firms should calculate redress payments in our updated statement on pension transfers redress guidance. 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.