Aegon has given its support to the FCA’s Retirement Outcomes Review but warns, if handled poorly, it could mislead customers into thinking there is less need to seek advice.
The group believes investment pathways could mean customers believe there is less of a benefit in seeking advice. It adds that default pathways for those entering drawdown could create the “damaging perception” among non-advised consumers that the option is ideal for their circumstances.
Aegon pensions director Steven Cameron says: “With hundreds of thousands of people using pension freedoms to fund their retirement through drawdown, there’s a huge need for advice on investment choices and how much money to take in a given year.”
He adds the proposed range of investment pathways linked to high level retirement objectives could help, but turning the concept into a simple shortlist which people can identify with “will be challenging”.
“We mustn’t give people the impression any default can offer the optimal, personalised investment solution or that their availability removes or reduces the benefits of seeking advice,” he says.
Within its response to the regulator, Aegon also rejects the need for any special treatment where non-advised customers use Sipps.
Responses on the FCA’s Retirement Outcomes Review discussion questions covering investment pathways, cash defaults and charges information closed yesterday, but responses to consultation questions on all other remedies is open until 6 September. The FCA says feedback on the discussion and consultation questions is expected in January 2019.