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FCA rejects calls to extend annuity comparison rules

The FCA will not extend finalised guidance for annuity comparison websites to lead generators despite industry calls to do so.

It has also rejected a suggestion to describe commission as “non-advised fee” on the annuity websites.

The regulator has today published guidance for annuity comparison websites after a review found the websites are misleading and failing to provide consumers with adequate risk warnings.

In February the FCA consulted on guidance on what constitutes a fair, clear and not misleading annuity comparison website.

It says several respondents to the consultation said the review should be widened to include lead generators and post-sale and governance issues.

But the FCA says: “Due to the limited scope of our review, in terms of time allocated and available resources, this would not have been possible.”

The guidance says annuity comparison websites must have “sufficient information and relevant warnings” on a number of areas, including whether a restricted panel of providers has been used.

Websites must also explain whether the service provided is advised or non-advised and what the commission or charges will be.

The FCA says some respondents to the consultation asked whether commission and charges should be expressed in monetary or percentage terms.

Another respondent said the term “non-advised fee” should be used in place of commission, so that consumers are aware the payment comes out of their pension fund.

But the FCA says introducing a new term “has the potential to cause confusion”.

The FCA says: “Commission and charges should be presented in a way that is fair, clear and not misleading.

“Consequently, whether they appear as a percentage or monetary figure will depend upon the context and individual circumstances of the consumer in order to be accurate and relevant. So we would leave this decision for firms.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Just posted this on a different blog site……. Ok, is it me? on adviser charges Martin Wheatley stated we need to put figures in actual monetary terms because 50% of the people did not know what 50% meant. So how in the name of Zeus’s butt will it be fair, clear and not misleading by leaving the status quo for comparison sites? The FCA has really surpassed itself this time. I now fully know for the first time that they really do not have a clue about what they are doing. Unbelievable, but hey ho, they they go. Have a good weekend everyone

  2. Julian Stevens 23rd June 2014 at 2:04 pm

    Why does the FCA insist on providing guidance instead of rules? Or at least an unambiguous framework or template for what it thinks it wants to see? Then again, whatever it comes out with, at a later date it’ll probably change its mind and declare No, no, no, that’s not what we meant.. To which the reply is usually Then why didn’t you make that clear at the outset?

    And so it goes.

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