But equally, the proposals do not take account of a reasonably large number of pension savers and schemes that will be caught by the proposals, despite many of those pension savers them being self-directed investors, with a high level of confidence in their investment decisions.
More broadly, and given the harm the proposals aim to prevent, the FCA should give greater consideration as to how individuals can be steered towards professional advice, when they have a specific amount of money they wish to decumulate or more complex financial needs for which guidance alone, while useful, may provide insufficient help.
Simon Harrington, Senior Policy Adviser at PIMFA, commented: “The proposals put forward by the FCA are welcome but ultimately imperfect given when pension savers may be nudged towards receiving guidance, as well as the ‘catch all’ nature of the proposals themselves.
“Ultimately a number of execution-only firms will be caught by the proposals despite having a large client base who will see little value in a Pension Wise appointment.
“However, we remain supportive of the proposals, provided that the frictions remain appropriate and recognise that once an individual has opted out of the process, their decision is respected.
‘In line with our view that the FCA should have a statutory objective to ensure good consumer outcomes, we believe that more emphasis should be put on identifying those individuals who could reasonably benefit from more tailored, professional advice at the point of retirement and guided towards this instead.
“We would therefore encourage the FCA to consider at what level an individual could reasonably benefit from professional advice and be signposted towards it in line with our desire for them to receive superior consumer outcomes, not just protected against the worst ones.”
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