The Pensions Regulator (TPR) has urged UK trustees to respond to a consultation launched by the Financial Conduct Authority (FCA) on financial advice overhaul.
Yesterday, the FCA published proposals to allow firms to offer a new type of help called ‘targeted support’, enabling them to make suggestions to groups of consumers with common characteristics.
TPR pointed out that trustees are among the stakeholders the FCA is seeking input from, especially regarding how this support could work in practice within occupational schemes.
Patrick Coyne, interim director of policy and public affairs at TPR, said: “It is clear savers need more help to make good retirement decisions. Targeted support and the Guided Retirement Duty are both so important if we are to help savers make the best decisions for them, and we want to work with trustees to get this right.”
Coyne added that this is an “important” consultation, and the views shared will help inform the implementation of Guided Retirement and the evolution of the wider regulatory framework.
He said: “I encourage trustees to respond to make sure targeted support works for savers.”
In the UK the FCA regulates contract-based pension schemes and TPR trust-based schemes.
Guided retirement was announced in the Pension Schemes Bill last month and is expected to make a “significant difference” to defined contribution (DC) savers in the future.
According to Paul Waters, head of DC markets at Hymans Robertson, two “very obvious” opportunities are “helping people know how much to save, and clearer instructions when people look to take their benefits when they are older”.
He pointed out that the research published alongside the FCA’s consultation highlighted that savers struggle with these decisions, especially in light of the volume of information they are often faced with.
“Targeted support can provide relevant steps for savers that cut through the noise,” he noted.
Waters said the FCA consultation questions about how trust-based schemes will respond to this are “especially welcome”.
“The benefits of a more uniform regulatory approach between TPR and FCA are well trailed, and the decumulation part of the puzzle for trust-based schemes is particularly troublesome,” he said.
He added that the data, technology, communication, and engagement techniques needed to make this work at scale are “there and ready to go” and easing the regulatory regime, as set out in the consultation, can “unlock the gates to the type of support needed for those not accessing financial advice today, many of whom are workplace pension scheme members”.
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