FCA Rules on Pension Advice — COBS, PS22/13 and the Consumer Duty Explained
Nadeem Pervazis a solicitor at Edward & Amaury Solicitors, a law firm authorised and regulated by the Solicitors Regulation Authority. Content is reviewed for legal accuracy and compliance with FCA guidance and SRA conduct standards.
TL;DR — Quick Summary
- ▸COBS 9/9A sets the core suitability rules for all financial advice — breach causes a private right of action under FSMA s.138D.
- ▸COBS 19 governs DB pension transfer advice specifically — strengthened significantly from October 2018 (TVC, transfer analysis, suitability report).
- ▸PS22/13 (August 2022) sets the current methodology for calculating DB transfer mis-selling compensation.
- ▸The FCA's starting assumption is that a DB transfer is unlikely to be in the client's best interests.
- ▸The Consumer Duty (July 2023) imposes an overarching obligation to deliver good outcomes — applying to advice given after that date.
UK pension advisers are subject to a detailed regulatory framework under the FCA. Understanding which rules apply — and when they apply — is central to any pension mis-selling claim. The rules set the standard of care against which advice is assessed. Breach of those rules that causes a financial loss gives rise to a compensation claim.
Quick Answer
FCA rules set the standard of care for pension advisers. Breach of COBS, COBS 19, or PROD that causes financial loss gives rise to a claim under FSMA s.138D, via FOS, or through the FSCS. Contact us for a free assessment of whether the advice you received met the required standard.
Key FCA Rules in Pension Advice Claims
COBS 9 / 9A — Suitability
Core suitability rules requiring advisers to know their customer and give suitable advice based on individual circumstances.
COBS 19 — Pension Transfer Advice
Specific rules for DB transfer advice: TVC, appropriate pension transfer analysis, suitability report requirements.
FG17/9 — FCA Finalised Guidance
FCA guidance clarifying expectations for DB transfer advice — the "starting assumption" that transfer is unlikely to be suitable.
PS22/13 — DB Transfer Redress
FCA policy statement setting the methodology for calculating redress in DB transfer mis-selling cases.
PROD — Product Governance
Product governance rules requiring target market identification — relevant where SIPPs or non-standard products were sold outside their target market.
Consumer Duty (2023)
Overarching duty to deliver good outcomes for customers — applies to advice given on or after 31 July 2023.
FSMA 2000 s.138D
Provides a private right of action for individuals for losses caused by breach of FCA rules.
The FCA\'s Starting Assumption on DB Transfers
The FCA has made clear — in FG17/9 and in COBS 19 — that its starting assumption is that transferring out of a defined benefit pension is unlikely to be in the client's best interests. An adviser must be able to demonstrate positive reasons why a transfer is suitable, not simply fail to identify a reason why it is unsuitable. This places the burden firmly on the adviser — and means a generic or superficial analysis will not meet the required standard.
See our guides on what a suitability report should contain, transfer value analysis, and how DB transfer redress is calculated under PS22/13.