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OFT targets adviser pension switching in ‘mammoth’ DC study

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The Office of Fair Trading has contacted networks and advice firms requesting details of factors influencing shopping around and pension switching by employers as part of its study of the defined-contribution market.

Earlier this month, Money Marketing revealed the OFT had circulated a DC questionnaire to insurance companies containing 99 different information requests.

Providers warned responding to the request by the 3 April deadline will be a “mammoth” task.

The OFT has also issued separate requests for information to networks, advice firms and employee benefit consultants.

The questionnaire for networks, seen by Money Marketing, asks for information on the factors determining the cost of advice in the workplace pension market, barriers to entry in the DC market and whether auto-enrolment will lead advisers to change the consumers they focus on.

It also focuses on the shopping around habits of employers, asking why companies decide to switch provider, which types of employer are more and less likely to shop around for alternative providers and whether switching rates will change as a result of any change in the role of advisers.

The questionnaire for advice firms and EBCs, also seen by Money Marketing, asks for details on the role of platforms in the DC workplace pensions market, how they will avoid conflicts of interest and the different factors which determine the cost of advice.

Advice firms, networks and EBCs have until 28 March to respond.

Hargreaves Lansdown head of advice Danny Cox says: “Given that millions of people will be auto-enrolled into an occupational scheme in the next few years it makes sense for the OFT to focus on shopping around by employers.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Might have been an idea to carry out the research in advance of setting out the rules…..but hey, if you’re getting paid anyway and not dependent on a fully functioning market to get paid – why worry?

  2. Many a former FP pensions salesman has become an IFA and churned his former client’s pensions.

    This is an area that needs investigating further, urgently.

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