The Pensions Regulator (TPR) updated its transfer guidance for Defined Benefit (DB) to Defined Contribution (DC) transfers on 11 November 2019, with trustees now required to contact financial advice firms to ensure staff providing advice to members are compliant under the new adviser rules before implementing a DB to DC transfer. The update has been prompted by forthcoming changes to the Financial Conduct Authority’s (FCA’s) Financial Services Register.
Trustees are already required to check if the adviser has the correct permission to carry out regulated activity in the FCA’s register, after they obtain confirmation that appropriate independent advice has been given. However, from 9 December 2019, trustees will need to take extra steps to confirm advisers’ permissions.
The main change to the guidance is the addition, in paragraph 39, of the following:
“On 9 December 2019, the FCA is replacing its Approved Persons Regime with the Senior Managers and Certification Regime (SM&CR). Only senior managers and selected other roles will now need to be approved. Other individuals, for example those carrying out customer-facing roles, will be subject to a certification regime carried out by their firm and most will not appear on the FCA register going forward. Trustees should continue to check the Register for firm details. They will then need to contact firms to confirm that the relevant individual works for that firm or check an appropriate third-party directory. A new Directory containing data on certified individuals will be released in 2020. Find out more in the FCA’s policy statement.”
Trustees will need to contact firms to obtain the necessary confirmation for the next 12 months or so, as the FCA has confirmed that the Directory user interface will not have the necessary information uploaded and live until December 2020.
Trustees should liaise with their administrators to ensure that they have updated their processes for compliance with the new requirements from 9 December 2019, which will involve additional investigative work until the Directory becomes live from December 2020.
Please note that where we provide administration services, we will be updating our procedures as a matter of course.
For further assistance in relation to this note, please feel free to contact Quantum Advisory.