The new targeted support rules should help more pension savers with retirement planning according to industry reaction.
There was widespread support for final rules published by the FCA, unveiled today. Many specifically welcomed the fact that the regulator had clarified the complaints procedure, should savers feel they have been recommended an unsuitable product under this regime.
In a joint statement with the Financial Ombudsman Service, the FCA said that any subsequent FOS suitability assessment for targeted support would be based on the design of consumer segments, rather than at an individual level.
Broadstone senior actuarial consultant Phil Smith says: “Firms will naturally be cautious about how consumer complaints following the new targeted support rules will be treated by the regulator. The proactive statement from the FCA and FOS aims to give firms greater confidence.”
The FOS has said that if it identifies an issue with wider implications that relates to the interpretation of FCAs rules on targeted support, it may seek a view from the FCA and consider how redress could potentially be assessed.
Smith adds: “This collaborative approach demonstrates a constructive effort by regulators to balance consumer protection with innovation, enabling firms to offer meaningful support that fills gaps between general guidance and full advice. As the regime develops, ongoing engagement and clarity on these boundaries will be vital to ensure that targeted support delivers tangible benefits for everyday investors while maintaining robust safeguards.”
There was support from any workplace pension providers, saying this will allow them to provide greater help to member when it comes to making retirement decisions.
L&G CEO DC and workplace savings Paula Llewellyn says: “For years, we’ve championed reforms that allow providers to move beyond generic guidance and today’s announcement gives the clarity the industry needs to progress this new era of support.
“Our own experience shows the power of innovative member engagement. Members using our guided retirement planner are now 50 per cent less likely to face a projected shortfall after adjusting their plans.
“This clear evidence of the benefits of tailored guidance underpins why targeted support will be so impactful as firms will now be able to take this to the next step and offer ready-made suggestions.”
Those in the pensions industry said this new targeted support regime could lead to more consumer being pointed to whole-of-market annuity intermediaries at retirement.
Canada Life managing director, retirement Pete Maddern says: “Today’s announcement is a positive step forward for consumer choice and support in retirement planning.
“We particularly welcome the FCA’s decision to allow targeted support providers to direct consumers to whole-of-market annuity intermediaries following a targeted support suggestion.”
He said this should help foster “a vibrant, competitive annuity market”.
Meanwhile, Fidelity International head of platform policy James Carter adds: “These final rules provide clarity for financial services providers, enabling us to progress the delivery of targeted support and help customers to make important decisions with confidence.
“We welcome the regulator’s open and constructive engagement throughout this consultation process, including a number of adjustments it has made to the rules based upon industry feedback.
“Targeted support can support a range of key priorities across the savings and investment landscape, and other in-flight policies, including help ing consumers make better decisions at retirement and counter the shift towards risk aversion.”
