Pension scrutiny takes centre stage in FCA's new business plan
Scrutiny of the new pensions landscape will be central to the FCA's work for the next year, officials said, as they outlined the regulator's plans this morning.
A follow up review will be conducted into the regulator's work on the annuities market, FCA chiefs said in the Business Plan for 2015/16.
The plan stated: "Our key objectives are to ensure that firms have stepped up and improved their practices since the publication of our thematic report (on retirement sales practices and annuities) in December 2014 and to ensure that firms do not seek to undermine or circumvent the Pension Wise service for the purposes of retention."
The highest priorities outlined in the report were:
• To examine whether the sales practices of pension providers have improved since the 2014 review into annuities sales
• To look at how firms were helping consumers make the right choice in relation to their pension given the options soon to be available to people as part of the Government's pensions reforms
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Martin Wheatley, chief executive of the FCA, said: "This is an important day in terms of setting out our priorities for the year ahead and also giving firms greater clarity on how they can expect to work with us.
"The Business Plan is set against the backdrop of the most fundamental changes to pension policy we have seen in over a generation.
"Therefore we will be looking at how the market is working and in particular, how the industry is adapting to this considerable change and what it means for consumers. This is exactly the sort of work that is expected of the FCA, and I believe is a fundamental benefit to consumers and industry."
The plan document stated retirement sales practices "will be a significant area of focus for us involving policy, supervision, market studies and thematic work."
It stated: "We will review how retirement sales practices of pension providers, in relation to their vesting customers, have changed. In particular to assess how firms are supporting customers to make the right choices given the wider range of options available."
From April officials will carry out a follow up to the market study into the outcomes consumers receive from the products and services they buy at retirement.
Officials said in the report: "This will review how well the market is working after the reforms and the guidance guarantee have been introduced, in particular after the full pensions flexibilities are introduced. We will look at both advised purchases (reviewing the suitability of advice given) and non-advised purchases (reviewing the information provided)."