Beyond the Review: Lessons from Pension Transfers, Fees, and Whistleblowing

Unknown Speaker

Hello everyone, welcome back to the B-Compliant Podcast. I’m Vicky Pearce and as always, I’m here with Rachel MacRae. Today’s episode, “Beyond the Review,” is a bit of a deep dive – but fear not, we’ll keep it practical as ever. Rachel, should we start with the FCA’s latest multi-firm review into pension transfers?

Rachel MacRae

Absolutely, Vicky! I’ve been poring over the FCA’s findings on life insurers’ pension transfer processes. And, honestly, there’s a lot for all firms to take away – not just insurers. One thing that stood out immediately was the FCA’s focus on outcomes. It’s not just about ticking boxes anymore, is it?

Unknown Speaker

No, not at all. The regulator’s really clear: delivering good outcomes is front and centre, especially under Consumer Duty. I liked that the review looked at life insurers working with individual personal pensions but made it clear these lessons apply across the board. It really does boil down to the whole journey – timing, clarity, transparency. And, dare I say it, don’t let legacy systems be your downfall! Did you catch the bit about delays?

Rachel MacRae

Oh, definitely. Most transfers were completed within 15 to 20 days if both sides were using digital platforms like Origo. Super efficient – but the FCA’s point is that speed isn’t everything. Sometimes adding what they call “positive friction,” like deliberate pauses, is actually important. That gives people time to really consider the risks. Imagine losing valuable benefits because things moved too quickly – nightmare.

Unknown Speaker

Exactly. The FCA is saying: be efficient, but don’t race ahead at the expense of your client’s best interests. There’s that tension, isn’t there, between being responsive and making sure you’re not just moving people along the conveyor belt. Positive friction might mean an extra check or a bit more time to consider options.

Rachel MacRae

Yeah, and actually, the review calls out “sludge practices” too. So, that’s things like unnecessary barriers or pointless delays – the classic sitting-on-paperwork situation. That can be just as harmful, especially if a client misses out on a good annuity rate or can’t access their pot. Under Consumer Duty, firms have to avoid both extremes: not too fast, not too slow, just… well, right for the customer.

Unknown Speaker

Spot on. I think management information was another big area. Some firms couldn’t say how long transfers took, or why something got held up, especially if they were still on paper-based processes. It makes oversight really tricky – and let’s face it, the FCA doesn’t want any “computer says no” excuses if you can’t demonstrate outcomes. If firms are relying on legacy systems from a merger or outsourcing, the responsibility still sits with them to make sure things are running smoothly.

Rachel MacRae

That’s such a recurring theme – own your processes and your data, right? And don’t treat outsourcing as a get out of jail free card. Oh, and the section on communication – so good! Firms need to spell out the potential consequences, like if someone’s giving up guarantees or the charges are going to change. Not just a generic risk warning but something understandable, timely, personalised… That’s under the “consumer understanding outcome,” if anyone’s ticking along with their Consumer Duty bingo.

Unknown Speaker

And, let’s not forget, the review treated pension transfers as a high-risk journey. That’s a cue for everyone, not just life insurers, to treat similar complex processes extra cautiously. Regular reviews, staff training, and keeping up to speed with industry forums on scams all made the FCA’s list of good practices. I might be wrong, but I feel like we’ve echoed a lot of this before – especially when we talked about data quality and client communications in previous episodes. Rach, any last thoughts before we move on?

Rachel MacRae

Only that no firm can afford to stand still. Even if you’re not a life insurer, have a look at your own client journeys, your MI, and your service standards. The FCA’s set the tone: good outcomes matter in practice, not just on paper.

Unknown Speaker

Alright, shall we move onto something a bit different now – the FOS consultation on case fees? It’s maybe not headline-grabbing at first glance, but the changes could make a real difference to how complaints are handled – and, crucially, how much it costs firms.

Rachel MacRae

Yeah, it’s actually pretty interesting if you get under the bonnet a bit! Basically, the FOS wants to move away from that one-size-fits-all £650 flat case fee. Instead, there’s this idea of a “staged” fee model, which would reward firms who sort complaints early. That makes so much sense to me – it encourages prompt resolution and probably better outcomes for customers too.

Unknown Speaker

I agree. And they’re talking about differentiating fees based on whether the complaint is upheld or not – a sort of “polluter pays” approach. So it’s fairer in theory, because firms handling things well at first contact wouldn’t be paying the same as those dragging their feet. Did you see the bit about the free case allowance, Rachel?

Rachel MacRae

Yep! They want to change the allowance so it’s not a number of free cases anymore, but a kind of monetary-value-based calculation. That should level the playing field, so smaller firms and professional reps aren’t disadvantaged. It does sound a bit complex though, especially when you add in the idea of quarterly upfront payments based on forecast volumes. I can see some finance teams getting twitchy about budget planning!

Unknown Speaker

True, but the consultation seems focused on smoothing funding and giving everyone more predictability. And to be fair, the data shows that most firms don’t pay any case fees at all – was it 70% last year? So if you’re not seeing many complaints, you shouldn’t be penalised. It’s those handful of firms with persistent, unresolved issues that will probably feel the biggest impact. It all sort of ties back to that principle of encouraging better initial handling, doesn’t it?

Rachel MacRae

That’s it, and it aligns with the FCA’s wider move towards outcome-based regulation. If you’re solving things early and fairly, you’ll likely save money as well as reputation! And for those keeping an eye on broader redress reform, this sits alongside the Treasury and FCA reviews, so there’s more change brewing. Responses close on 8th October 2025, so if you’ve got a view… now’s the time to make it heard.

Unknown Speaker

Definitely. I always say don’t be shy on these consultations – it’s your chance to shape policy that’ll affect your firm in real ways. Should we talk about whistleblowing next? Feels like that theme of learning and culture runs through, doesn’t it?

Rachel MacRae

Yeah, let’s dive into it. The latest FCA whistleblowing stats are really eye-opening – reports are up again this quarter. It was 315 between April and June, compared to 281 in Q1, and way up from the same period last year. It feels like, slowly, people are getting more confident about raising concerns.

Unknown Speaker

I does, and the fact that 68% of whistleblowers revealed their identity – that’s a huge trust boost for the FCA. But it also points to something deeper, which is this cultural shift. The most common themes are still compliance, fitness and propriety, and of course, organisational culture itself. Consumer Duty allegations came up nearly a hundred times as well.

Rachel MacRae

Yeah, and I think that’s a sign that firms can’t treat whistleblowing as a tick-box policy. Especially now, with that new “failure to prevent fraud” offence coming in from September, it has to be woven into the way people work. I might be going on a tangent, but it reminds me of a training session I ran not long ago – we set up a kind of “open forum” and, honestly, once a couple of people spoke up, the whole tone shifted. Staff went from seeing whistleblowing as scary to something almost normal, part of protecting each other. It really does change things when leaders listen openly – even if it’s not all comfortable to hear!

Unknown Speaker

It’s such a good point. Trusted, well-publicised channels are critical, but so is leadership commitment – all the way up to board level, like the FCA said in their report. And it’s not just about action – even if a report doesn’t lead to regulatory steps, the intelligence might still support wider supervision. Firms should use that information for continuous improvement, not just damage control. Rachel, any practical advice for compliance teams looking at their own culture?

Rachel MacRae

Honestly, start small and keep it real. Create spaces where staff can speak up safely, make examples of how concerns have helped, not hurt, and get senior teams to take time to listen. Even just reviewing reports or feedback regularly can shift the culture. And with the reporting form and email being the most popular channels, firms need to check those routes are working, not just on paper but in practice.

Unknown Speaker

Can’t argue with that. Keep an eye out for those subtle shifts within your teams and don’t treat the new offence as a compliance hurdle – it’s much bigger than that. Well, we’ll wrap it up there for this week. Rach, thanks for your insights as ever – always a pleasure.

Rachel MacRae

Thanks, Vicky! And thanks to everyone for tuning in – let us know your thoughts, and we’ll see you next time for more regulatory news and, hopefully, a few laughs along the way! Bye!

Unknown Speaker

See you soon, everyone. Bye!