The government is consulting on whether employee benefit consultants (EBCs) and corporate advisers should be regulated for the workplace pensions advice they give to employers.
In a Treasury consultation published yesterday, The Pensions Investment Review: Unlocking the UK Pensions Market For Growth paper asks for industry views on whether bringing advisers into FCA regulation would mean that advisers are required to consider the value of schemes or investment strategies in their advice, resulting in a lesser focus on cost.
The paper says investment consultants in particular play an important role in advising pension scheme trustees on their investment strategy. There has been interest in the regulation of these services, industry engagement suggests any focus on cost in the advice provided on investment strategies is driven by client choice and preference. Many firms are already regulated by the FCA but not all are.
On the question whether workplace consultants and advisers should be regulated consultation paper asks:
What evidence is there that regulating the advice that some employers receive on pension selection will better enable them to consider overall value when selecting a scheme?
And
What evidence is there that regulating the advice that pension schemes receive on investment strategies would enable more productive asset allocation? What type of regulation would be effective?
The paper also asks:
What evidence is there that placing a duty on employers to consider value would result in better member outcomes? If such a duty was introduced, what form should it take? Should it apply to a certain size of employer only? How can we ensure it is easier for employers to make value for money comparisons?