The Financial Conduct Authority has published a cost benefit analysis for the provision of the Pension Wise guidance service, estimating it will spend around £950,000 monitoring the compliance aspect.
The regulator stated it could spend up to £562,000 as a one-off monitoring cost and up to £395,000 per year in ongoing costs.
This included keeping tabs on The Pensions Advisory Service and Citizens Advice Bureau, collecting their data on a regular basis and carrying out mystery shopping exercises.
The paper said most of the money will be spent on people, with teams of between two and four half and full time staff required in the first year, with an ongoing requirement of between two and three full time staff per year.
“While it is not reasonably practicable to quantify the benefits of the standards, they are likely to materially increase the quality of the guidance service and lead to improved consumer outcomes through better decision-making,” read the paper.
The FCA also estimated Tpas and CAB would incur up to £468,000 in one-off compliance costs, with up to £98,000 annually in ongoing compliance costs for the service.
As part of the exercise, the regulator also published a consultation paper on its policy for making recommendations to the designated guidance providers and to the Treasury.
Comments are requested by 8 May and once responses have been considered, a policy statement will be published on the finalised recommendations in the summer.
peter.walker@ft.com
