Pensions - Articles - Red Flag cases rise to a three month high

 The Transfer Value Index remained largely unchanged over the month as financial markets remained stable.

 XPS Pension Group’s Transfer Watch monitors how market developments have affected transfer values for a typical pension scheme member. It also monitors how many members are choosing to take a transfer from their DB pension scheme and, through its Red Flag Index, the incidence of scam red flags identified at the point of transfer.

 On the 7th May, the Financial Conduct Authority (FCA) announced its intention to continue scrutinising financial advice on pensions transfers. The FCA has extended its fourth thematic review into the quality of DB transfer advisory firms for at least another year, until Spring 2022.

 Mark Barlow, Partner, XPS Pensions Group commented: “It is disappointing to see an increase in the Red Flag Index after continual falls for the last three months. With warning signs of poor member outcomes remaining so high, we welcome the FCA’s decision to extend their thematic review with the aim of driving up standards of pensions advice. In the meantime, we continue to work with trustees and employers to ensure their members are able to access high quality advice.”

 Chart 1 – XPS Transfer Value and Transfer Activity Index

 Chart 2 – XPS Red Flag Index