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Clear rules sought on contractingout schemes

The FSA is coming under pressure to clear up confusion surrounding whether IFAs have to demonstrate that personal pensions are at least as suitable as stakeholder as a vehicle for contracting out.

The issue concerns whether the compliance requirement, which demands that IFAs must demonstrate that a personal pension is “at least as suitable” as stakeholder as part of the reasons why process on personal pensions also applies to contractingout schemes.

Without clarification on how far RN53 extends, there could be a danger that IFAs are making non-compliant recommendations on contracting out because they are not applying RN53 to their advice.

Scottish Life head of communications Alasdair Buchanan says: “It is far from clear in what situations RN53 extends. Logic suggests that it does cover contracting-out vehicles but it requires clarification urgently. It shows the industry is being dragged into a state of confusion by matters which the regulator has not resolved.”

Informed Choice managing director Nick Bamford says: “What the adviser should be free to concentrate on is making sure the right decision on contracting out is being made, not wasting time on the name of the personal pension vehicle recommended because nowadays there really is very little difference between personal pensions and stakeholder.”

FSA spokeswoman Jackie Blyth says: “RN35 applies across the board and is not limited to any type of pension or scheme.”


Ecology society cuts rate

Ecology Building Society is cutting its residential mortgage rate to 6.75 per cent with effect from June. The green lender is upping the loan to valuation level to 90 per cent from 80 per cent as well as waiving the administration fee of £150 on applications received before July 31. The society offers loans on […]

Get building with Britannia

Britannia Building Society is laying new foundations in the mortgage market with the introduction of the self-build mortgage.Self-build is aimed at people who are looking to build a house from scratch and has been introduced in co-operation with self-build specialists Buildstore, formerly known as the Self Build Advisory Service, which offers advice on building your […]

Edward Vaizey

What has the Labour Government ever done for us? The last four years have seen some of the greatest upheavals in the financial services industry for at least a decade, if not longer. Where once it was teachers and doctors who were overwhelmed by rapid change from tinkering Governments, now it is product providers and […]

Skandia Life to hold IFA conference

Skandia Life is to hold an IFA conference in London on June 11, chaired by ITN veteran Sir Trevor McDonald.The three main presentations will cover the use of past performance, the future of advice and how to sustain a competitive advantage as an IFA in the 21st century.There will be a question and answer session […]

Retirement - thumbnail

(Another) downhill stroll — retirement planning

A report published this morning by the CIPD (CIPD Employee Outlook March 2015) provides yet more interesting data to the changing landscape of retirement planning. It should be remembered that we are in a period of genuine flux here given that the default retirement age was scrapped three years ago, and new pension freedoms come online in April. Both of these alterations will have a huge impact on how employees plan for their retirement.


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