The FCA and the Government are undertaking a joint review to examine the regulatory boundary between financial advice and financial guidance - known as the Advice Guidance Boundary Review. Their goal is to create a regulatory framework that ensures consumers get the help they want, at a time they need, and at a cost that is affordable. As part of the review, they have published a policy paper containing further detail on their targeted support proposals to enable firms to deliver better pension outcomes for their customers.
Rob Yuille, Head of Long-Term Savings Policy at the Association of British Insurers, said:
“Navigating the financial world can be confusing and many consumers aren’t receiving enough support. This can harm their financial resilience and living standards, especially in retirement. So we’re very pleased to see the FCA develop its targeted support proposal for pensions, which would allow firms to make targeted suggestions to groups of consumers with common characteristics. This should deliver better outcomes for consumers, for example, helping them to build up pension savings, consolidate pension pots, and take better decisions around tax-free cash and their income in retirement. We agree with the FCA that targeted support should be free for the consumer at point of use, channel agnostic and outcomes-based, building on the requirements under the Consumer Duty.
"The independent research the FCA has published shows strong consumer demand for targeted support, especially from those making pensions access decisions. Our own consumer research on pensions withdrawals suggests that guidance personalised to the consumer can improve consumer outcomes considerably.
"The collaborative approach taken between industry, consumer groups and regulators has worked very effectively up until this point. We look forward to engaging further with the FCA on the proposals set out in this consultation paper and their discussion paper on the wider pensions framework, as well as their simplified advice and targeted support proposals for retail investments due out next year.
"Government should aim to align these proposals with their plans within the Pension Schemes Bill for pension scheme trustees to provide guided retirement services to their members. We want to see consistent consumer outcomes regardless of whether it is TPR or FCA that regulates someone’s pension product."
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