Advisers may be a key beneficiary of the guidance guarantee, as the Financial Conduct Authority has confirmed that referring consumers to regulated advice is one option that guidance providers must do at the end of a session.
In a new consultation paper on the guidance guarantee, published today (27 November), the FCA said that at the end of a guidance session a guidance provider must refer consumers to relevant sources of further information, including specialist advice, regulated advice, support tools or directories.
Earlier today, Fidelity’s retirement director Alan Higham said that regulated financial advice should become the default option post-April.
The regulator’s paper also gave details as to how the guidance service will be delivered, stating that Treasury and the designated guidance providers will “work together” on the operational detail of the service.
Regarding the content of the guidance guarantee, the FCA agreed that further clarity was needed. It said the guidance guarantee session must:
• inform consumers of the scope, purpose and limitations of the session;
• inform consumers about the pension entitlement and other personal and financial information that the designated guidance provider may request from them during the session;
• request information from the consumer about their accumulated pension pots;
• request information about the consumer’s financial and personal circumstances that is relevant to their retirement options; and
• alert the consumer to other sources of information and advice as appropriate and at relevant points during the session.
The session must also provide the consumer with information about the relevant options, as well as the potential tax implications and debt obligations. It must also set out the next steps for the consumer to take and provide them with a record of their guidance session.
The regulator also said it would be beneficial to alert customers of what they would need in advance of the session.
The statement read: “However, given that in practice there are multiple parties involved in the process, at this stage we do not intend to require the designated guidance providers to inform consumers before the session about the type of information the consumer may wish to gather before the session. We will keep this under review.”
The FCA also confirmed that the Treasury has indicated it will be ready to roll out the pensions guidance service online prior to April 2015.
As a consequence, the regulator amended its rules to ensure that when providers are communicating with their pension customers prior to April 2015 about their retirement options, they will be required to signpost them to the guarantee.
This would mean that all customers receiving information about retirement options from their provider in the period between the guidance being available and 6 April 2015 would receive information about the pensions guidance service and how to access it.
The FCA said it expects the work being undertaken on designing a standardised signposting letter to have produced a template, or standardised wording which firms can use by this time.