The FCA has consulted (CP22/15) on its detailed proposals for calculating consumer redress in cases where BSPS advice was found to be unsuitable, whether by FOS itself or independent assessors approved by the FCA. This follows an earlier consultation (CP22/6), still under consideration by the FCA, on its plans to introduce a consumer redress scheme for the benefit of BSPS members who were advised to transfer out of their DB scheme.

Though we have no BSPS cases, we were sufficiently concerned about the errors in the FCA’s thinking and processes for assessing transfer advice that we took a lot of trouble to respond to that earlier consultation. Whatever the improvements that could be made to the calculation of fair redress, they cannot compensate for unfairness or errors in the finding that the advice was unsuitable.

To avoid spending a lot of time on the technical improvements to the redress calculation, we did respond to the FCA but only with some general observations. These focus on the excessive prudence in several assumptions that we believe, individually and when taken together, introduce over-compensation that conflicts with the intended degree of prudence, as set out as the FCA’s own Objective 2, and as the basis for the legal opinion.

You can read our response here.