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Industry backs CII pension freedoms standards plans


A move by the Chartered Insurance Institute to develop professional standards for frontline provider staff has been welcomed by the industry.

The CII says it is concerned there are “inconsistencies” in the way staff fielding pension freedoms calls are dealing with customers.

The professional body is carrying out an information gathering exercise with a number of providers to determine current standards.

CII director of financial services and insurance markets Steve Jenkins says: “Following the pension freedoms, many consumers will naturally go to their provider for guidance.

“Providers are taking very different approaches to this, which could result in hugely different customer outcomes.

“The reputation of financial services as a whole is often affected by the weakest link. We believe all staff should have a basic level of pensions knowledge, so regardless of who a consumer speaks to, they get someone who knows what they are talking about.”

Jenkins says the standards are likely to take the form of a voluntary charter which providers can sign up to.

A qualification for staff which tests both technical knowledge and soft skills is one option under consideration.

The CII says it is too early to give an indication of the costs that would be associated with the qualification.

Jenkins says: “This is about holding up best practice to our members and driving standards up as an industry rather than waiting for the regulator to impose changes. It is about conduct, ethics and professional development.”

Experts say the move is positive as long as the demands on staff and any associated costs are reasonable.

Independent pensions expert Alan Higham says: “Any provider dealing with frontline customer queries needs to ensure its staff have a good level of pensions knowledge and to monitor that on an ongoing basis.

“As long as the standards are not overly onerous, I’m sure most providers will welcome something which brings consistency and higher standards.

“The standards would also need to be administered pragmatically, to ensure those who have existing qualifications do not have to take another test unnecessarily.”

Syndaxi Chartered Financial Planners managing director Robert Reid says: “This is a risk prevention strategy and a smart move by the CII.

“There may be knowledge gaps among provider staff, and if the industry does nothing there is a risk of things going wrong for consumers which will be difficult to defend to the regulator if they materialise.”

Independent regulatory consultant Richard Hobbs adds: “If providers don’t control what happens in their call centres well, they are running enormous risks of breaching treating customers fairly rules, so standards will be pretty high already.

“But one of the consequences of the RDR and pension freedoms is that provider call centres are coming under greater strain as consumers do not know where else to go for help. Therefore many providers will find it helpful to have a professional body producing standards and training, as that can act as a defence against potential criticism.”

At the start of the year, pension providers bolstered resources to deal with the surge in pension freedom enquiries in April.

Scottish Widows hired 400 extra staff to deal with enquiries from customers, while Aegon took on 150 new customer-facing staff.

How the CII has developed its adviser qualifications for the pension freedoms

In April the CII launched a new unit ‘R08 Pensions update’ to develop advisers’  knowledge of the pension reforms. The programme costs £134 for members and £176 for non-members.

The unit covers:

  • Changes to the HM Revenue and Customs tax regime introduced by the Taxation of Pensions Act 2014
  • New legislative, reporting and compliance requirements arising from the pension reforms
  • Developments in pension provision
  • Changes in the rules for members transferring their benefits
  • Changes to pension income options
  • Changes that will be made to state pension provision from 6 April 2016
  • Key factors that should be taken into account when advising a client how to derive an income in retirement.

The qualifications advisers must hold for pension transfers

The FCA requires firms advising on pension transfers to have the advising on pension transfers and opt-outs permission. The advice must also be given or checked by a pension transfer specialist in certain circumstances.

In June the FCA published its final rules on pension transfers, which clarified:

  • Advice on all transfers from defined benefit to defined contribution schemes require the pension transfer specialist qualification, regardless of whether the transferred benefits are being crystallised
  • Transfers from occupational DC schemes without safeguards do not require the pension transfer specialist qualification.



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