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Retirement Income Planning
As I’m sure many of you advising on pension transfers are
aware, there was a Guidance Consultation paper issued on 5th June
2020 “GC20/1 – Advising on Pension Transfers†to lay out proposals for what is
expected from firms when advising in this area.
The consultation period closed last September and the Final Guidance is
expected this month.
The guidance will cover:
·
Setting out of the High Level Regulatory Regime
·
Requirements regarding PI Insurance
·
Systems and Controls
·
T&C and CPD requirements
·
Financial Promotions
·
Using Introducers
·
Disclosure of Charges
·
Triage services
·
The Advice Process
·
Scheme Data and a proposed Template to obtain
information
·
Abridged Advice
·
“Carve-Out†clients
·
Appropriate Pension Transfer Analysis (APTA)
·
Transfer Value Comparator
·
Cashflow Modelling
·
Demonstrating Suitability
·
Insistent Clients
·
Record Keeping
·
Guidance for Employer/Trustee
Whilst this Guidance is surrounding the specifics of
advising on pension transfer (particularly DB pensions), it is also a useful
tool for retirement planning in general.
We would urge you not to disregard the Guidance solely due to the fact
that you do not advise on pension transfers.
The FCA have already set out the fact that they will be
conducting a Suitability Review of
Retirement Income advice, which was already meant to have started but is now
subject to delay due to the Covid Pandemic. It would make sense that this
Guidance will form a part of their review process and firms would be expected
to have read and understood its content.
Looking at a suitability and sustainability in Retirement Income
planning is essential and there are large elements of this Guidance that will
assist firms in integrating this within their services and propositions.
Once the final guidance is published, we will produce a
summary of the guidance to help assist firms in advising on Pension Transfers
and/or Retirement Income planning.