As Iâ€™m sure many of you advising on pension transfers are aware, there was a Guidance Consultation paper issued on 5th June 2020 â€œGC20/1 â€“ Advising on Pension Transfersâ€ 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:
Â· Setting out of the High Level Regulatory Regime
Â· Requirements regarding PI Insurance
Â· Systems and Controls
Â· T&C and CPD requirements
Â· Financial Promotions
Â· Using Introducers
Â· Disclosure of Charges
Â· Triage services
Â· The Advice Process
Â· Scheme Data and a proposed Template to obtain information
Â· Abridged Advice
Â· â€œCarve-Outâ€ clients
Â· Appropriate Pension Transfer Analysis (APTA)
Â· Transfer Value Comparator
Â· Cashflow Modelling
Â· Demonstrating Suitability
Â· Insistent Clients
Â· Record Keeping
Â· 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.