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A-day costs soar to 1bn

Pension consultancy Hunts-wood claims the cost to the industry of preparing for A-Day will be around 1bn, at least double the amount anticipated.

Huntswood says there is a consensus that life offices will pay around 450m in systems and product development costs to ensure their back offices and pension wrappers are compliant but this will be more than doubled when the cost of customer advice and communications are thrown into the mix, bringing the total close to 1bn.

Senior account director Mark Fry says these costs will be raised by the FSA’s treating customers fairly initiative. he says: “The tax simplification and treating customers fairly rules will revolutionise the way the financial services industry functions and does business. In the run-up to A-Day, the industry will spend over 450m on systems and product development, with a similar figure set to be spent on customer and distributor communications.”

“The industry is only just getting to grips with the customer advice and communication implications.”

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