The FCA has raised concerns that annuity comparison websites are misleading and failing to provide consumers with adequate risk warnings.
The regulator carried out a review of 13 comparison websites alongside its investigation into the annuity market.
The FCA uncovered concerns about the information provided on all 13 websites. As a result, it is consulting on new guidance in a bid to raise standards in the non-advised sector.
The FCA says: “We found good practice in the presentation of alternative options to buying an annuity, such as deferring or pension drawdown, and the use of jargon-free language.
“All of the websites we reviewed raised concerns. Key information and risk warnings were often missing or insufficiently prominent.
“Importantly, we also found that information on 12 of the 13 websites did not satisfy the key requirement to be fair, clear, and not misleading, for example describing the service as ‘free’ when commission would be received by the firm.”
The FCA says the firms involved are making changes in response to the concerns raised during the review.
Informed Choice managing director Martin Bamford says: “There is a huge risk of consumer detriment from the non-advised sector. The FCA needs to get rid of commission on non-advised sales so consumers know exactly how much they are paying and what they are getting in return.”