FCA to target non-advised sales in pension freedom review

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The FCA has published the terms of reference to its Retirement Outcomes Review; a major study into how savers and providers are reacting to the pension freedoms.

As part of the review the regulator will look at areas including shopping around and product switching; non-advised sales; and changing business models.

In addition, the FCA is to review its own role.

It says: “Effective regulation needs to move with the times. Are there examples of FCA regulation that are overly burdensome and may constitute disproportionate barriers to entry or prevent useful product innovation?”

The new report, which has been delayed because of the Financial Advice Market Review, follows the retirement income market study.

FCA director of strategy and competition Christopher Woolard says: “In our 2016/17 business plan, we committed to looking across the pensions sector to ensure our policies support the fair treatment of customers and encourage competition. Deciding how to use pension savings is one of the most important decisions people will make.

“For a competitive and innovative market, it’s crucial that the market develops in a way that allows consumers to engage with their options, shop around, and switch providers where appropriate. We also want firms to compete hard for business, offering good outcomes for consumers through lower prices, products and services that meet customer needs, better customer service and wider choice.

“Since the introduction of the pension reforms there have been a number of key market developments. We want to assess how competition is developing in the retirement income market by investigating how firms and consumers have responded to the new freedoms.”