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Market welcomes focus on pensions in FCA business plan

The FCA is right to place long term savings and pensions as one of its seven core focus areas, but will have its work cut out to regulate the market, according to experts.

In its business plan for the year ahead released this morning the regulator said work was in place to target high-risk and complex investments.

It is also continuing to review the effectiveness of robo-advice models, and will release a verdict next year on whether Financial Advice Market Review achieved its objectives of widening access to advice.

Other priorities include managing the UK’s exit from the EU and following through on the asset management market study and the platform study.

Reacting to the business plan Barnett Waddingham senior consultant Malcolm McLean says: “Clearly we still have a major problem with defined benefit to defined contribution transfers. Many people are still getting this wrong and the FCA needs to look further at it.

“The FCA says it wants to ‘make the UK and the financial services sector a hostile place for criminals, a safe place for consumers’. We are a long way from that judging by the number of reported scams and those which have not been reported.”

Hargreaves Lansdown head of policy Tom McPhail adds: “There’s a strong case to be made for extending the FCA’s statutory remit beyond its current three objectives, to include an additional provision around actively seeking improvements to individuals’ long-term financial well-being. In the meantime, a paper looking at savings adequacy will be a step in the right direction.”

KPMG UK partner David Miller says: “The FCA is clearly having to make some hard choices about how to prioritise its activity across the rest of the market.

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“The focus on consumer vulnerability and access to financial services is key and underlines the challenge the regulator faces in successfully balancing innovation and big data with good customer outcomes in its approach to regulating in a more digital world.

“The FCA’s planned interventions seek to target areas of potential customer harm but crucially firms have to recognise it falls to them to have the right culture and governance in place to protect the end users of financial services.”


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