Focus on benefits, not pension cost – AMPS
Sipp clients do not want to pay more for better transparency, the Association of Member-Directed Pension Schemes has stated.
Responding to the FSA’s consultation paper on Sipp disclosure, Andrew Roberts, chairman of AMPS, said the industry was not trying to hide costs from clients.
He said it was wrong therefore for the regulator to just concentrate on product costs instead of focusing on the benefits of Sipps.
Mr Roberts said: “It is clear that there is political motivation for consumers to understand the cost of their pension, whatever form that pension might take.
“The government needs to encourage the population to save, otherwise people will have to work longer which reduces the number of jobs for the younger generation. The focus should be on understanding the benefit of a pension, not the cost.
“In terms of cost, it should be sufficient for consumers to understand broadly what price bracket a personal pension falls into and this can be done in a number of ways without worrying about spurious accuracy. Understanding how fuel efficient your new car will be could be a complicated calculation but usefully there is an accepted scale to aid comparison.”
In its March quarterly consultation, the FSA said: “All personal pension scheme disclosure documents should include projections, effect of charges and reduction in yield information, no matter what the underlying assets are.
“In our view unless equivalent disclosure rules apply to all schemes, no matter how invested, consumers and advisers will not have the information they need to understand the costs and benefits applying to competing schemes and to identify an appropriate and cost-effective personal pension choice.”
Mr Roberts said the FSA’s current proposals provide no added value to the consumer or to the industry.
His view echoed calls by Aegon last month to delay the changes to Sipp rules so the industry could concentrate on other regulatory changes, such as the retail distribution review.
Steven Cameron, head of regulatory strategy at Aegon, said that while the insurer supported proposals to add Sipp assets into the key features illustration disclosure regime, firms were already busy changing their systems for RDR.
Steve Robinson, managing director of Bristol-based IFA Clarke Robinson, said: “I am not seeing much demand from customers for more detail on costs. Clients want less paperwork, not more.”