The FCA has issued yet another strand of its thinking on the Advice Guidance Boundary with the emphasis very much on support for the public with their pensions.
The main element is introducing 'targeted support' for pensions as part of the Advice/Guidance Boundary Review.
Pension Age has good coverage and reports as follows –
“The consultation seeks views on allowing firms to provide targeted support to consumers in different scenarios, such as if they find someone is drawing down their pension unsustainably or is uncertain about how to take their retirement income.
“Under the reforms, firms will be able to provide groups of consumers who share the same characteristics with a bespoke suggestion.”
The chief executive of Quilter Steve Levin makes the case for why Labour’s pension plot twist needs a rethink.
He wants a pragmatic and phased approach and details one of the major unfairnesses as follows –
“Under the current proposals, there could be eye-wateringly high levels of taxation. Applying 40% IHT and then income tax (possibly at 40% or 45%) leads to marginal rates of 64% or 67%. This can get more extreme if pension assets push an estate over £2m, removing the residence nil-rate band.
“It is unconscionable to tax remaining pension funds at levels that could remove their value almost entirely.”
The following is a positive story amid all the regulatory news. As a child, seeing the difference financial advice made to his mum made Jamie Lowe want to pursue a career in financial services and he now runs True Self Wealth reports FTAdviser.
Brooks Macdonald is seeking a new platform tech provider as Citywire New Model Adviser reports.
The search comes after Brooks spent four years and several million pounds on a new platform with tech provider SS&C.
The following reads like a great piece of journalism from Citywire again headlined how £3.4bn of debt has changed the face of financial advice
“A Citywire investigation reveals the most detailed picture yet of the levels of borrowing fuelling consolidators’ adviser acquisitions, uncovering previously unreported debt issued by Guernsey, Jersey and Cayman Islands parent companies.”
The Pension Protection Fund could reduce its levy to zero amid a large surplus, Corporate Adviser reports.
The FCA has launched a major review of defined contribution (DC) pensions rules.
I think the big issue here is going to be FCA misgivings about consolidators, so I quote that section extensively below -
Consumers may have decided to transfer without comparing the performance and charges in both the ceding and receiving schemes.
• Incentives offered by potential receiving schemes might cause consumers to decide to transfer or consolidate based only on the prospect of immediate or near-term reward. They might not consider the full financial implications of their decision. Examples of incentives could include cash incentives (e.g. £100 cashback or investment contribution) and non-cash incentives (e.g. fee-free or low-fee periods).
• Some customers of trace and consolidate services don’t know they have given consent to initiate a transfer. Instead, they may believe they have only consented to the potential receiving scheme finding information about existing and/or lost pensions.
“We want to understand whether these issues are widespread. We invite stakeholders to share with us any other areas of concern. We also want to understand whether any element of our framework (or the wider regulatory landscape) is contributing to these concerns, or firms’ ability to address them.”
Corporate Adviser also provides this neat summation.
The FCA is seeking feedback on how to improve accessibility to guidance and resources and exploring changes to the regulatory framework for pension projections, digital tools, and consolidation. The goal is to ensure that “transfers and consolidation are efficient and in the consumer’s interests”, especially with the introduction of pensions dashboards.
