PIMFA calls for FCA proposals to give stronger nudge to pension savers towards advice

29 June 2021

PIMFA calls for FCA proposals to give stronger nudge to pension savers towards advice

PIMFA, the trade association for wealth management, investment services and the investment and financial advice industry, welcomes the Financial Conduct Authority’s (FCA) proposals to direct disengaged pension savers towards professional support to help them navigate retirement decisions. The proposals recognise a lack of preparation for, and knowledge about, retirement among a large group of pension savers

But equally, the proposals do not take account of a reasonably large number of pension savers and schemes that will be caught by the proposals, despite many of those pension savers them being self-directed investors, with a high level of confidence in their investment decisions.

More broadly, and given the harm the proposals aim to prevent, the FCA should give greater consideration as to how individuals can be steered towards professional advice, when they have a specific amount of money they wish to decumulate or more complex financial needs for which guidance alone, while useful, may provide insufficient help.

Simon Harrington, Senior Policy Adviser at PIMFA, commented: “The proposals put forward by the FCA are welcome but ultimately imperfect given when pension savers may be nudged towards receiving guidance, as well as the ‘catch all’ nature of the proposals themselves.

“Ultimately a number of execution-only firms will be caught by the proposals despite having a large client base who will see little value in a Pension Wise appointment.

“However, we remain supportive of the proposals, provided that the frictions remain appropriate and recognise that once an individual has opted out of the process, their decision is respected.  

‘In line with our view that the FCA should have a statutory objective to ensure good consumer outcomes, we believe that more emphasis should be put on identifying those individuals who could reasonably benefit from more tailored, professional advice at the point of retirement and guided towards this instead.

“We would therefore encourage the FCA to consider at what level an individual could reasonably benefit from professional advice and be signposted towards it in line with our desire for them to receive superior consumer outcomes, not just protected against the worst ones.”

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About PIMFA – the Personal Investment Management & Financial Advice Association

• PIMFA is the trade association for firms that provide investment management, investment services and advice to everyone from individuals and families to charities, pension funds, trusts and companies.
• The sector currently looks after £1.65 trillion in private savings and investments and employs over 63,000 people.
• PIMFA represents both full and associate member firms. Full members provide a range of financial solutions including financial advice, portfolio management, as well as investment and execution services. They assist everyone from individuals and families, to charities and pension funds, all the way to trusts and companies.  Associate members provide professional services to the PIMFA community.
• PIMFA leads the debate on policy and regulatory recommendations to ensure that the UK remains a global centre of excellence in the wealth management, investment advice and financial planning arena. Our mission is to create an optimal operating environment so that its member firms can focus on delivering the best service to clients, providing responsible stewardship for their long-term savings and investments.
• PIMFA has made numerous recommendations to the FCA regarding the Future of Advice, the Future of Supervision, & the FSCS levy – read more.
• PIMFA was created in 2017 as the outcome of a merger between the Association of Professional Financial Advisers (APFA) and the Wealth Management Association (WMA) with a history as a trade association since 1991 – read more.
• Further information can be found at pimfa.co.uk

Contact

For further information on this release or other press matters please contact:

Matthew West, PIMFA PR Manager – MatthewW@pimfa.co.uk, +44 (0)20 7382 0376

Sheena Gillett, PIMFA Communications & PR Director – sheenag@pimfa.