Pensions - Articles - FCA proposals to extend the remit of IGCs

Aegon’s response to the FCA’s Independent Governance Committee extension of remit Consultation paper which closed to responses today.

 In its response to the FCA’s Consultation Paper Independent Governance Committees: extension of remit, Aegon has challenged the ‘executive’ role the FCA proposes for IGCs for investment pathways which from next summer are to be offered to customers who enter drawdown without advice.

 IGCs were set up in 2015 to challenge the value for money offered by providers to members of workplace personal pension schemes.

 Steven Cameron, Pensions Director at Aegon said: “With investment pathways still a year off and with the final rules not yet published by the FCA, we remain unconvinced that IGCs have a necessary role to play in designing them or ensuring they offer value for money. However, any role they do have should be consistent with what they fulfil for workplace personal pensions. This involves challenging providers on value for money, including charges, customer service, the quality and clarity of communications, investments and security.

 “We are concerned that the FCA proposals on investment pathways go beyond this and appear to cross the line into ‘executive’ responsibilities. Any requirement for IGCs to have assessed and effectively approved investment pathways before they are offered to customers, as well as on an ongoing basis, extends into product design. While providers may wish to consult with their IGC on such matters, we believe ultimate responsibility sits firmly with the product provider.

 “If IGCs are to be given a duty of challenging the value for money of investment pathways, it’s particularly important that the FCA sets out its expectations regarding pathways. A wide range of individuals with different attitudes to investment risk may opt for each of the four pathways, so the specific investment strategy can only ever represent a broad fit and can’t mirror individual attitude to investment risk.

 “We do support the FCA’s other key proposal to extend the IGCs’ remit to consider Environmental, Social and Governance issues as well as stewardship.

 “The paper suggests ongoing work between the FCA and the Pensions Regulator could lead to more prescription on how to assess value for money. One of the main successes of IGCs has been their ability to tailor their assessment of value for money to their provider and customer base, so we must make sure any additional prescription doesn’t detract from this.”

Back to Index

Similar News to this Story

Benchmarking DB transfers against workplace pensions
Under new rules to be introduced from 1st October, IFAs who are recommending a transfer out of a DB pension will need to benchmark the proposed destin
Comment on BBCs verdict to end free TV licences for over 75s
Please see the below comment from Steven Cameron, Pensions Director at Aegon, on the BBC’s decision to go ahead with a plan to end free TV licences fo
PPF supports struggling levy payers with payment extension
The Pension Protection Fund (PPF) has announced that it will give levy payers struggling as a result of the coronavirus pandemic up to 90 days interes

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS


Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.