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For many firms, redress has traditionally been associated with individual complaints, long investigations,
12/02/26
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Why no loss doesn’t mean no risk in today’s redress market
For many firms, redress has traditionally been associated with individual complaints, long investigations, and complex remediation exercises. But as we explored in our recent webinar ‘The redress lens: Expert insight every wealth manager needs to know’, the market has shifted. With it so too has the role redress now plays in acquisition strategy, consolidation and long-term risk management.
While today’s gilt environment has led to a growing number of “no loss” outcomes, this does not mean firms can afford to be complacent. If anything, the current landscape presents both opportunity and hidden risk.
Watch the full recording here.
From complaint handling to strategic due diligence
Historically, redress activity was largely driven by defined benefit (DB) transfer complaints, often escalated through claims management companies or the Financial Ombudsman Service (FOS). For many years, this formed the backbone of redress work across the industry.
More recently, rising gilt yields have reduced losses on a significant proportion of historic transfers. This has taken energy out of traditional complaint-driven redress but it has also opened the door for consolidators and wealth managers to reassess DB risk, in some cases becoming willing to acquire books of business they may previously have avoided.
As a result, redress has evolved from a reactive process into a critical component of mergers and acquisitions (M&A) due diligence. Firms are no longer just asking, “What is the loss today?” but increasingly, “What could this look like under different market conditions?”
Prioritising risk and where to focus
Few organisations have the appetite – or resources – to review every historic case in detail. A more pragmatic approach is to identify where the greatest potential exposure lies.
In practice, this often means starting with larger transfer values, older cases (particularly those from periods such as 2016–2017) and advice given to younger clients, where suitability can be harder to evidence by today’s standards. Investment choices also matter. Cases in which funds remain in cash for extended periods or in which clients move into higher-risk or non-standard investments, can significantly increase the likelihood of loss.
Rather than beginning with suitability reviews, many firms are now reversing the traditional process. By first performing redress calculations on higher-risk samples, it becomes possible to quickly establish whether losses exist at all. Where outcomes are no loss, firms can avoid unnecessary suitability work. Where losses do emerge, attention can then be focused more efficiently.
This shift reflects a more proportionate, data-led way of managing legacy risk.
The long tail beyond today’s market
One of the most important messages from our online session was that redress is not static. A “no loss” result reflects conditions at a specific point in time, not a permanent state.
Market movements remain a key driver of future exposure. If gilt yields were to fall materially, cases that appear benign today could quickly become loss-making. Regulatory methodology may also evolve, with future FCA updates potentially changing the basis on which redress is calculated.
For this reason, scenario testing is becoming an increasingly valuable tool by modelling outcomes under different yield environments. This helps risk teams move beyond point-in-time assessments and build a clearer picture of potential long-term liabilities.
In short, an effective redress strategy now requires forward-looking analysis, not just retrospective calculation.
Tailoring the approach to each firm
There is no single model that fits every organisation. For individual cases – particularly those already upheld by FOS – detailed data gathering and precise calculations in line with FCA guidance are essential.
For consolidators or firms preparing books for sale, a broader approach is often more appropriate. Using point-of-sale data and market indices can provide a robust, high-level view of exposure without the need for exhaustive file-by-file review. The key is aligning the methodology with the firm’s objectives, scale and risk appetite.
At TCC, our focus is on helping firms turn uncertainty into actionable insight, whether that means supporting a single redress calculation or building a strategic view across hundreds of historic cases.
Looking ahead
While current conditions may feel favourable, redress remains a long-term consideration for any firm holding DB transfer risk. The most resilient organisations are those that combine today’s opportunities with tomorrow’s planning: prioritising high-risk cases, understanding sensitivity to market change and embedding redress into wider governance and acquisition strategy.
How TCC can help
Redress is a critical part of managing legacy risk and protecting the value of your acquisitions. At TCC, our team combines deep technical expertise with independence and extensive experience across complex products and regulatory scenarios, helping firms navigate redress with confidence.
Get in touch today to discuss how we can help quantify, manage and resolve redress obligations, turning uncertainty into actionable insight to support your M&A or consolidation strategy.
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