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The Client

  • A financial advice firm providing Defined Benefit (DB) transfer advice over a 38-month period.

The Challenge

  • Required an independent Skilled Person review under s166 FSMA of its DB transfer advice, from identifying the review population to assessing suitability and managing client opt-ins.

Overview

Thistle Initiatives was appointed as a Skilled Person under s166 FSMA to review a Firm’s Defined Benefit (DB) transfer advice over a 38-month period. The work involved identifying all advised clients, managing a client opt-in process, assessing advice suitability using an FCA-approved methodology, and developing and implementing a redress approach. Regular reporting was provided to both the Firm and the FCA.

Scope of Work

  • Cleansed and analysed business register data to identify the review population
  • Managed informed position letter (IPL) opt-ins and MIG information requests
  • Completed Defined Benefit Advice Assessment Tool (DBAAT) reviews for all opted-in clients
  • Reviewed “do not transfer”, deceased and insistent client cases
  • Agreed on redress methodology and implemented QA processes
  • Delivered interim, progress and final reports

Key Findings

  • 686 total advised cases; 173 required full review
  • 146 cases involved unsuitable advice
  • 65 had no financial loss
  • £969,256.21 paid in redress to customers

Systemic Issues Identified

The review highlighted widespread weaknesses across the Firm’s DB transfer advice process, including:

  • Know Your Client and disclosure failures (risk, experience, capacity for loss, fee disclosure)
  • TVAS shortcomings (incorrect assumptions, non-guaranteed CETVs, inappropriate metrics)
  • Poor suitability reports (misleading presentation of critical yield, generic objectives, irrelevant content)
  • Other concerns such as weak audit trails, inconsistent fact-finding, conflicts of interest, and failure to consider non-transfer alternatives

These issues indicated significant regulatory non-compliance and a high risk of unsuitable advice being provided.

Engagement and Governance

A constructive relationship was maintained with senior management and legal advisers, with clear mobilisation, regular tri-party meetings and transparent communication.

Quality Assurance and Reporting

All reviews were undertaken by experienced pension transfer specialists. A structured QA process—including second reviews, consistency checks, and a dedicated QA committee—ensured robust and defensible outcomes. Comprehensive reporting was provided, including two interim reports, a progress update, the final report, and 173 individual DBAAT assessments.

Outcome

The Skilled Person delivered clear recommendations to address deficiencies in the Firm’s systems, controls, and advice processes. These enhancements were implemented by the Firm, supporting improved compliance and reducing the risk of future customer detriment.