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FCA warns insurers to treat clients fairly on pensions advice
| Published: | 15 Apr at 6 PM |
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Tagged: Canada, Pension Transfer
In yet another move to protect savers at home and abroad from mis-sold investments, the FCA has warned insurers, IFAs and pension providers against disadvantaging clients when advising on the recent changes in annuity law.
The regulator is to issue a set of guidelines telling pension providers and financial advice firms how to handle customers who wish to cash in their pension pots. According to the FCA, if the guidelines are not followed, sanctions or fines will be imposed.
A spokesperson for the regulator said that providers and FAS must now change their business models to comply with the changes announced in the March budget. Readjustment may well be necessary regarding advice given to clients regarding drawing a lump sum and buying an annuity with their savings.
Since the budget speech shock and its effect on some insurers’ share prices, the FCA has done its best to ensure savers receive the most suitable advice as regards annuities. This latest move puts the ball in product providers’ and FAs’s courts, with potential lack of growth in a fund, a fall in annuity rates and subsequent loss of retirement income all needing to be explained to potential clients.I
ndustry analysts are expecting sale of annuities to fall be around 75 per cent as a result of the changes, and savers aren’t expected to have much sympathy for an industry sector which has been ripping them of for decades. This latest FCA announcement is seen by some as part of an admission that less than appropriate advice has been given across the board in the past.
The regulator is to issue a set of guidelines telling pension providers and financial advice firms how to handle customers who wish to cash in their pension pots. According to the FCA, if the guidelines are not followed, sanctions or fines will be imposed.
A spokesperson for the regulator said that providers and FAS must now change their business models to comply with the changes announced in the March budget. Readjustment may well be necessary regarding advice given to clients regarding drawing a lump sum and buying an annuity with their savings.
Since the budget speech shock and its effect on some insurers’ share prices, the FCA has done its best to ensure savers receive the most suitable advice as regards annuities. This latest move puts the ball in product providers’ and FAs’s courts, with potential lack of growth in a fund, a fall in annuity rates and subsequent loss of retirement income all needing to be explained to potential clients.I
ndustry analysts are expecting sale of annuities to fall be around 75 per cent as a result of the changes, and savers aren’t expected to have much sympathy for an industry sector which has been ripping them of for decades. This latest FCA announcement is seen by some as part of an admission that less than appropriate advice has been given across the board in the past.
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