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

Rising theft puts households and insurers on alert
Households and their insurers need to be on alert for rising levels of theft, according to the digital home insurer Policy Expert, whose analysis of c
Nine in ten school leavers unsure what a pension actually is
Pensions can be a confusing topic for people of any age, however, with shocking new statistics revealing that nine in ten (88%) UK school leavers don’
Finance firms provide double the pension contributions
Research from Profile Pensions finds which industry’s employers offer the highest level of contributions – that is, how much they pay into pensions as

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

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