It’s deja vu all over again, at least for those of us who remember the last Big Recession.
The FSA has been reviewing advice given to customers wanting to switch into a personal pension or SIPP. Having looked at 500 cases across 30 firms, they found that 16% of clients had received unsuitable advice. 25% of firms involved gave suitable advice consistently but for another quarter, they gave inappropriate advice in 33% or more of the cases.
The FSA is writing to over 4,500 firms to lay down the law and saying what steps it expects to see implemented by by Q3 2009. Failure will involve ‘further action’.
Defective advice included
* switches involving extra costs without good reason;
* recommendations that did not match the customer’s attitude to risk and their personal circumstances;
* failure to explain the need for, or put in place, ongoing reviews when these were necessary, and
* loss of benefits from existing pension schemes without good reason.
As I said, just like the 90s.
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