In a letter seen by Money Marketing, the regulator has asked bigger firms to submit copies of the wake-up pack they provide customers four months beforetheir retirement date as well as the reminder pack issued six weeks before retirement.
The FSA has asked to see copies of internal documents that show firms’ processes and corresponding service levels at each stage of an Omo transfer to uncover delays. It also wants details of service levels and monitoring controls employed by third parties.
The document states: “Last year the FSA conducted a thematic review of the open market option for maturing personal and stakeholder pensions. In light of that review, we are undertaking an information-gathering exercise in relation to firms’ practices in advising their Sipp clients and the effectiveness of Omo information given to pension customers approaching retirement age.”
The FSA has also requested examples of Omo literature from smaller firms, as part of its thematic review into small Sipp providers, which was revealed by Money Marketing last week.
Last summer, the regulator found four in 10 insurance companies were failing to adequately flag up the Omo to clients. It claimed that many providers’ wake-up packs were unclear or misleading.
An FSA spokesman says: “We are taking a sample of larger Sipp providers’ literature to make sure it meets our requirements on the Omo. We aim to report back to the firms and the industry by the third quarter.”
In 2008, the proportion of people using the Omo fell to 37 per cent from 39 per cent in 2007, according to the Asso- ciation of British Insurers.
The Retirement Adviser head of retirement planning Nick Flynn says: “It is a natural step on from the work that the FSA did on insurers. It is definitely useful.”
But he says that as Sipp contracts are more likely to be handled by IFAs than insured contracts, clients are probably more aware of the options open to them under the Omo.