“However in order to ensure that Pension Wise delivers high-quality and consistent guidance, the government is giving the FCA responsibility to set guidance standards and monitor Pension Wise’s compliance with them.”
A spokesman for the FCA added: “The support and information processes that firms put in place and design must comply with our requirements.
“Only organisations that HM Treasury designate as guidance providers will be able to deliver the Pension Wise guidance.”
Simon Webster, managing director of Kent-based Facts & Figures Chartered Financial Advisers, said: “It doesn’t make any sense but most regulation doesn’t.
“While I happen to think the reforms are fantastic and it is right to introduce some sort of guidance around it, this whole thing has been rushed in and the net result is everyone has been caught on the back foot.”
The letter (below) was published on 17 February at the HM Treasury’s request:
The article published on the FT Adviser website on 4th February - ‘FCA in a knot over guidance given by delivery partners’ is, I’m afraid, wholly misleading.
The article asserts that the Treasury and the FCA are unable to explain how the forthcoming government service, Pension Wise, will differ from regulated financial advice. This is untrue.
As we explained very clearly to Mr Fantato, unlike regulated financial advice, the guidance provided by Pension Wise will be free and impartial and it will not recommend particular products or providers. The FCA do not regulate guidance, whether from an independent financial adviser or otherwise. That’s why Pension Wise requires a different regulatory approach and why the Government is legislating to give the FCA responsibility to set guidance standards and monitor Pension Wise’s compliance with them. This will help ensure that Pension Wise delivers high quality and consistent guidance.
The article also claims that ‘it is understood an adviser could find himself in trouble simply for suggesting the guidance he gave was the same as the Pension Wise guidance.’ This is also untrue.
As we clearly outlined to Mr Fantato, the criminal offence only captures people who pretend to be offering guidance for or on behalf of the government or who suggest that the information that they provide is part of the service provided by Pension Wise. It is damaging and frankly inaccurate to suggest that IFAs could be prosecuted for simply providing guidance on pensions that is similar to the guidance provided by Pension Wise. As long as they do not pretend that they are giving such guidance as part of the Pension Wise service IFAs will not be at risk from prosecution under the new offence.