The FCA says it is the industry’s “responsibility” to find a solution to the insistent client problem that is holding back savers’ access to the pension freedoms.
In a policy statement published today the regulator responded to feedback on pension transfers and clients who want to act against the recommendations of an adviser.
It says the insistent client issue has implications beyond pension transfers and that a “more holistic view” needs to be taken before any intervention can considered.
The FCA says the pension freedoms have “increased apprehensions of advising and transacting in some cases”. It adds there is a risk consumers lose confidence in the industry’s ability to deliver the reforms.
However, it also says: “While we consider whether there is a need for us to undertake more work in this area, we believe there is a responsibility upon the industry itself to consider how it can deliver on customers’ expectations.
“We do not see any case for moving away from client’s best interests as a starting point for advice.”
Broader changes to the pension transfer process are also being considered.
The regulator says current transfer value analysis comparisons “are unlikely to be helping customers to be making informed decisions; this is because the included information is so overwhelming that is is doubtful if the document is being read”.
It adds it will consider changes to the advice regime around enhanced transfer exercises as part of its response to the Financial Advice Market Review.
Other changes announced in the paper include a proposal to ban product application forms from being included in wake-up packs, extending advice requirements to UFPLS and introducing more flexibility around the so-called second line of defence.
However, the regulator has extended the deadline to one year for firms to comply with new rules on the margins taken by Sipp firms on cash, pension freedom communications and projections.
Firms will now have until 6 April 2017 to make the necessary changes.