FCA Ban Highlights Ongoing Risks Around DB Pension Transfer Advice and PII Compliance

The FCA’s latest enforcement action against a former director of Bluesky Wealth Management is another clear reminder that regulatory expectations around DB pension transfer advice remain exceptionally high.

The regulator banned former director Frank Breuer from working in UK financial services and issued a substantial financial penalty after finding that DB pension transfer advice had been carried out while the firm lacked appropriate professional indemnity insurance.

According to the FCA, the firm continued advising on defined benefit pension transfers despite not holding suitable PII cover from April 2019 onwards. The regulator also found failures relating to integrity, regulatory cooperation and compliance with restrictions imposed to protect consumers.

The case highlights several important lessons for advisory firms.

1. PII cover must remain appropriate at all times

Professional indemnity insurance is not simply an operational requirement; it is a critical consumer protection mechanism. Firms operating in higher-risk advice areas, particularly DB pension transfers, should regularly review whether their cover remains appropriate for the activities they undertake.

2. Run-off cover should not be overlooked

Where firms stop carrying out certain regulated activities or surrender permissions, consideration must also be given to whether historic advice remains adequately protected through suitable run-off arrangements.

3. Governance and regulatory transparency matter

The FCA continues to place significant emphasis on integrity, openness and cooperation. Firms should ensure senior management understand the importance of accurate regulatory disclosures and robust governance controls.

4. DB pension transfer advice remains a key FCA focus area

This latest action reinforces that pension transfer advice continues to attract heightened scrutiny, particularly where firms cannot clearly evidence suitable processes, oversight and consumer protections.

For firms, now is an appropriate time to:

• Review current PII arrangements
• Assess whether cover aligns with regulated activities
• Revisit governance and oversight frameworks
• Consider run-off exposure where permissions have changed
• Ensure senior managers understand accountability expectations

Firms should be reviewing whether their PII arrangements, governance controls and historic advice exposure would genuinely stand up to FCA scrutiny.

If you’re unsure where the risks sit, contact B-Compliant to review your current arrangements.