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Webb warns FCA of 'over-regulating' DB transfer advice

Webb warns FCA of 'over-regulating' DB transfer advice

Royal London policy director Steve Webb has warned of the Financial Conduct Authority (FCA) 'over-regulating' defined benefit (DB) transfers.

Speaking at the Great Pension Transfer event in Peterborough, Webb (pictured) said it was important the FCA does not stop transfers that are in the clients best interest with its regulation of the market. 

'Now any fool, and I know because I have done it, can say there is going to be a scandal and if it doesn't then everyone forgets you said it. But the danger is that we over regulate,' he said.

'Nobody is going to sack a regulator for stopping stuff that would have been to their benefit, but they are going to sack a regulator for allowing stuff people should not do.'

He said the FCA should not err on the side of caution with its regulation of the transfer market to the extent where clients do not do a DB transfer when it is in their interests.

'There is a downside to stopping people as well as a downside to allowing people.'

In his speech, Webb gave a defence of DB transfers and the pension freedom reforms introduced during his time as pensions minister in the coalition government. 

He admitted current employer Royal London would benefit from people moving to defined contribution (DC) pension schemes but added it did not track whether new business came from DB schemes. 

'When someone opens a DC product with us the question of the source is not material, it could be a DC to DB transfer it could just be someone opening an account we don't tend to focus on where the money comes from. But of course because we are chosen on a regular basis that is a flow of business,' Webb said. 

Earlier today Royal London released a survey which found that typical DB transfer values are now equivalent to the average house price in the UK. 

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