The APPT response says Simplified Advice is an example of trying something similar without much success. It illustrates how the success of this will depend on FCA and FOS being clear about their approach and their recognition that the aim is to get a high volume of advice based on a lower level of understanding of customers, to drive action by most customers (members) who would not pay for advice. To enable this “good enough rather than perfect” approach to flourish will depend on clear boundaries established by FCA and FOS and a balanced approach. FCA need to actively monitor implementation and tackle those misusing the system, whilst at the same time recognising that the system depends on a sensible overall approach to customer segmentation but not perfect understanding of each. It will not work well if TS communications are full of caveats and disclaimers, which mean recipients are disengaged.
There will be some areas that this is not right for. We agree with the proposed carve out for Annuities – though providers will need to be able to suggest considering annuities without signposting a particular product or provider. We also agree with excluding the ability to suggest consolidation of pots into a particular product.
There are very limited references in the consultation to FCA working with TPR. The FCA will need to ensure a joined-up approach with TPR to avoid regulatory confusion inhibiting development of the approach.
Commenting on the response, APPT Vice Chair, Vassos Vassou said: “We anticipate that, since to undertake Targeted Support, an entity needs to be authorised by the FCA, this will typically mean being a corporate. For Master Trusts that could be done by trustees if they form a corporate entity but, given the scale of the task, they are likely to leave this to the scheme funder. For sole employer DC trusts, only the largest are likely to look at doing this. Regulations should enable trustees to subcontract Targeted Support to another party, since not providing this would disadvantage their members against those in trusts / Master Trusts that do.”
The APPT added that where trustees decide to leave provision to the corporate (scheme funder) or another subcontracted party, they will need to be clear to members who the Targeted Support is provided by. FCA should be mindful to be clear on implications for trustees but should seek to avoid these restricting communications that trustees can currently make.
APPT response to FCA Targeted Support consultation
|
