Scrutiny of retirement advice will increase, as the FCA clearly has misgivings about whether they are delivering better outcomes for all.
Scrutiny of retirement advice will increase in the coming months, due to concerns over whether the pension freedoms are truly delivering better outcomes, according to financial services firm Just Group.
Commenting on the publication of the Financial Conduct Authority’s (FCA) 2020/21 business plan, Stephen Lowe (pictured), group communications director at Just Group, said: “Yesterday marked the fifth anniversary of the pension changes that extended flexibility of income drawdown to the mass market.
“The reforms are popular, but the FCA clearly has misgivings about whether they are delivering better outcomes for all.”
A factsheet published by Just Group found that delegates at the Just Retirement Leaders Summit 2020believed that pension freedoms have given 48% of high net worth consumers more certainty around what to do with their pension savings, compared with just 29% of ‘middle Britain’ consumers.
Lowe added: “[The FCA] is particularly concerned about consumers being exposed to more investment risk than they expected or can absorb, and that the decision-making support available is not working well enough.
“Although the reforms have put more responsibility on individuals, the regulator is determined to impose high standards to ensure firms act in consumers’ interests.
“We can expect scrutiny of retirement advice to ratchet up in the coming months.
“It is unfortunate that some of the important work needed to build further safeguardsfor people who don’t receive regulated advice – such as the introduction of investment pathways that was due this summer – may be delayed due to the impact of the coronavirus epidemic.”
