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&#39Give employers role in preventing misselling&#39

The pension misselling scandal could have been avoided if employers had been encouraged to give financial advice to their employees, says Conservative Shadow secretary of state for work and pensions David Willetts.

As the Financial Services Act 1986 did not permit employers to advise staff about their occupational schemes, Willetts says a lot of them did not act when employees transferred to personal pension plans.

He believes employers should be allowed to give advice, which would avoid a repetition of similar misselling.

Willetts believes there is a strong role for independent advice. But where it is not being sought by consumers, he says employers should be encouraged to fill the gap, especially when it comes to the suitability of group pensions.

Willetts says: “I think many people do need independent advice but also employers running occupational pension schemes ought to feel they can offer advice on the schemes they run.

“During the so-called pension misselling scandal, employers could not tell employees about their schemes in case it was seen as giving financial advice without being properly registered. They sat on their hands when they saw employees doing things that might not have been in the employees&#39 best interests.”

The Tories have called for the stakeholder deadline to be pushed back by six months and firms with fewer than 10 employees to be excluded from the requirement to provide a scheme for their employees under the current regulations.

Willetts says anecdotal evidence points towards employers which currently offer occupational schemes simply transferring to a stakeholder and stopping contributing.


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