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Regulator hands out religious edict on Asps

The FSA has warned IFAs to check the religious background of clients when selling alternatively secured pensions despite insisting that Government restrictions have nothing to do with its rules.

Last month, the Treasury told Money Marketing it would scrap Asps if IFAs continued to “wilfully abuse” them to avoid inheritance tax.

It says Asps were only set up for people with religious objections to annuities but admits that imposing legal restrictions on the industry could breach human rights legislation.

The FSA has now increased fears of an Asp crackdown, warning IFAs that if they do not perform sufficient checks on the religion of Asp clients they may fall foul of its suitability criteria. It has also posted information on its website advising policyholders to consider Government comments before taking out an Asp.

An FSA spokeswoman says: “Part of our suitability criteria will include whether the adviser has asked for suitable information from clients regarding their religion. This is Government policy and has nothing to do with our rules. But we do expect advisers to take into account Government policy.”

The FSA refuses to confirm if advising a client who is not a member of a religious group such as the Plymouth Brethren would be deemed unsuitable.

Hargreaves Lansdown head of pensions research Tom McPhail says: “The FSA has been forced to act because they cannot ignore the Treasury’s comments but its present proposal does not really seem workable.”

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