View more on these topics

FCA could ask IGCs to scrutinise drawdown

The FCA has hinted that it could extend the remit of independent governance committees to give them responsibility for overseeing providers’ drawdown arrangements.

Firms providing workplace pensions have had to have an IGC in place since April 2015 to report on value for money.

The committees can look at value for money in other areas such as drawdown, but their official responsibility is specifically related to workplace pension provision.

Some IGCs at companies that offer workplace pensions and other products have made assessments of decumulation offerings. However, firms that offer drawdown but not a workplace pension will not have an IGC in place to scrutinise the policy.

Responding to a Law Commission report on pension funds and social investment yesterday, the FCA said that it would consult on new rules to force IGCs to also assess environmental, social and governance concerns.

One-third back compulsory advice on drawdown

It said that it would combine this with work in its ongoing Retirement Outcomes Review, which could hand IGCs responsibility for reporting on drawdown too.

The FCA response reads: “We are currently undertaking work on retirement outcomes – including on potentially making IGCs responsible for ensuring that decumulation products provide value for money – and to explore whether competition is operating effectively in the interests of non-workplace pension customers.”

Hargreaves Lansdown head of policy Tom McPhail says: “Whilst the FCA doesn’t explicitly say it will ask IGCs to take responsibility for scrutinising drawdown plans, it is a strong hint this is what we’ll see in the forthcoming Retirement Outcomes Review paper.

“Given they were responding to a paper on ESG issues and the need to take account of members’ ethical considerations, for them to flag up their work on retirement outcomes and ‘potentially making IGCs responsible for ensuring that decumulation products provide value for money’ looks like a pretty strong steer that’s what we’ll see when the Retirement Outcomes Review paper is published.

“Such a move would also make a lot of sense. We’re expecting the FCA to ask providers to deliver simplified pathways to help their non-advised members transition from work to retirement; if you’re doing that then it also makes sense to build in a layer of independent governance to oversee how commercial companies do actually look after their customers through this process.”


Wells Street Journal: Pensions Regulator lobs a rotten Nest egg

Much has been made of the Government’s taxpayer funded campaign encouraging voters to back remaining in the EU. The Leave side predictably went ballastic when details emerged of the 14-page booklet sent to every household in the UK at a cost of £9m. Leading Brexiteers Boris Johnson and Nigel Farage also presumably received the handy […]


How much are advisers charging for pension transfers?

Defined benefit pension transfer charges are being put under the microscope again as the regulator turns over more potential conflicts of interest. With the British Steel Pension Scheme the latest to dominate headlines and the FCA ready to interrogate further as it extends its review to include all firms authorised to give pension transfer advice, […]

Ros Altmann

Ros Altmann: My solution to the DB transfer advice debacle

The six million people in defined benefit pension schemes who could be enticed by the high transfer values on offer are causing much consternation among parliamentarians, the regulator and financial advisers. The FCA has found a significant proportion of transfer advice to be unsuitable or questionable. Its latest consultation suggests big changes to the way […]


View from the CEO

Andrew Carter, CEO of Royal London Asset Management, offers his latest view of the market. View the article here The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s […]


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. Steven Farrall 20th June 2018 at 9:10 pm

    Another ill thought through intervention that is bound to fail.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm