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FCA to review non-advised drawdown over charges concerns


The FCA is to review pension freedoms advice and non-advised drawdown as part of a raft of studies over the next year.

Speaking at the Institute of Financial Planning’s annual conference in Newport today, FCA senior technical manager Rory Percival set out the regulator’s areas of focus in the pension freedoms space.

He said the FCA is focused on scams, legacy contracts, sales and advice, value for money and decumulation products.

Percival said the regulator will carry out several pieces of work in the new year on non-advised sales and advice.

He said: “On the non-advised side, we will look at whether customers are getting the right information and whether they are making the right decisions based on that information.

“We will also look at whether people are getting suitable advice, which is a market study so quite a big piece of work. Clearly we needed to wait until we were a number of months into the new regime before we could assess that.”

He said the regulator is entering the advice study without “any preconceptions” and aims to gather information to see whether there are any areas of concern.

Percival said the FCA is worried about non-advised drawdown and complex or expensive decumulation products.

He said: “There has been a big move away from annuities to drawdown. There are concerns about non-advised drawdown – that clients are in a drawdown product which needs managing and thinking about, but they have not got an adviser.

“In the decumulation space, there’s concerns that products become more complex and carry higher charges. That would be something we will keep an eye out for and there will be an information request around that.”



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There are 5 comments at the moment, we would love to hear your opinion too.

  1. So not only are they regulating advisers, they are going to try to regulate the public? Good luck with that. They cannot regulate advisers effectively, properly and proportionately, they have to lump them in with every other type of provider/seller of products so what chance have they got? None I think is the answer.
    When are they going to take the decision that whether they like it or lump it, people will do whatever they want to do regardless of whether or not it the right thing to do? The FCA cannot protect the public from themselves even though it wants to as it thinks they are too thick to make decisions for themselves without having some poor sod to cough up when it goes wrong.
    Time to move with the times FCA. Let people do whether want and put up with the consequences if they make a mistake.

  2. Douglas Baillie 6th October 2015 at 4:45 pm

    Is this also the opportunity to bring non-authorised advisers, who sell un-authorised investments to stupid gullible people into the frame as well?

  3. I just wish the FCA would focus a little bit more on costs to advisers in delivering these new freedoms, thereby reducing the cost to clients. It is a one way street at present.

  4. how are the FCA going to ask a non regulated/non authorised firm to give them information about non regulated/non advised sales?? As a regulated firm, we are bound to comply with any requests for information even if we had a non-advised service, those firms that have non authorised status surely just reply saying “you don’t regulate me, go away”???

  5. I think the previous posters are missing the point here, it is the product which is non-advised i.e. a client going straight to a provider and what they are charging a la non-advised annuities (3% anyone?)

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