Aegon has urged for rules that would allow regulated firms to offer consumers complete pension dashboard support from data access to taking action.
In response to the Financial Conduct Authority (FCA) consultation on the regulation of pension dashboard service firms which closes today, Aegon highlights how pension dashboards may improve user engagement and argues for regulatory changes that would allow companies to help consumers make well-informed decisions.
The firm emphasises the significance of the Consumer Duty and the FCA’s framework in safeguarding consumers and suggests merging dashboard and off-dashboard services to enhance interaction and promote pension pot consolidation.
According to Aegon, the FCA should think about enabling users to take data out of both viewing and post-viewing services. The off-dashboard services offered by advisers and other regulated businesses could then be used in conjunction with this data.
Aegon pensions director Steven Cameron says: “Pension dashboards have the potential to create a step change in pension engagement. But to fully capitalise on this opportunity, regulation should allow firms with appropriate permissions to support individuals not just to view their pensions data but crucially to make informed decisions and act on them.
“While the Government has ruled out individuals undertaking transactions on pension dashboards, the FCA regulatory framework will determine how easy or hard it will be for individuals, particularly if not seeking advice, to take that ‘next step’ from viewing data to taking action.
“We appreciate that pension dashboards are a new concept and the FCA must protect consumers from scammers. But where regulated firms are involved, the Consumer Duty adds further regulatory protections to ensure good outcomes. Often, consumers need protecting from their own inertia and if taking action is too complex or daunting, this can lead to poorer outcomes.
“We are concerned about the sharp break in the journey when moving from dashboard to other transactional services a firm may offer. We’d like the FCA to explore allowing consumers to extract data from both ‘view’ and ‘post-view’ services in a form which could then be used in conjunction with ‘off dashboard’ services offered by advisers and other firms with appropriate regulatory permissions.
“Better engagement, prompted by dashboards, could lead to greater consolidation of pots where safe to do so. FCA data shows that it’s small pots which are most likely to be taken as lump sums at retirement. Dashboards offer a great opportunity to encourage more consolidation into larger pots, improving consumer engagement with their journey towards and into retirement.”
