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MP warns that annuity compulsion poses misselling threat

IFAs who advise clients to invest in a pension product could be accused of misselling under the current regulatory regime, says Labour MP John Butterfill.

The prominent MP is known in Parliamentary circles as a pension specialist. He believes pensions get much less favourable treatment than tax-efficient investment such as Isas, venture capital trusts and enterprise investment schemes, making it bad advice for IFAs to recommend a pension.

Butterfill says one of the key areas which puts pensions at a disadvantage is comp ulsory annuity purchase. He has tabled a Private Members Bill for the relaxation of this requirement.

The bill passed a first reading last week.

Butterfill claims he has cross-party support for his bill.

He says: “There is a recognition that pensions are being treated less fairly than other forms of investment. You could almost accuse IFAs of misselling if they were to advise a client to invest in a pension.”

l Comment, p41

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