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FSA says IFAs advising on ASPs do not have to check clients’ religion

The FSA says IFAs will not need to ask clients about their religion when advising on an Alternatively Secured Pension.

The regulator has updated the guidance on its website, after its earlier warning to customers to take Government restrictions into account caused confusion in the market.

The Government says Asps are only designed for clients with a moral or religious objection to annuities and has promised to crack down on “willful abuse” of Asps by advisers using them to avoid inheritance tax.

Other comments from the FSA’s press office, and reported in Money Marketing, have indicated the regulator would assess whether IFAs had asked their clients about religion as part of its suitability of advice criteria.

But the new guidance, in the small firms sections of the website, states advisers are required to keep up to date with potential changes to the law and take them into account when advising clients.

The FSA states: “That does not require you to ask a client about their religion when advising on an ASP, but – in appropriate cases – it does require you to warn the client that the Government may act to restrict the availability of Asps and that, if it does, that might advsersly affect the client.”

Hargreaves Lansdown head of pensions research Tom McPhail says:
“This is an eminently sensible move and rather what I was hoping the FSA to expect of us. The earlier comments from the regulator were ambiguous.”

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