This week’s news was dominated by pensions with the regulator publishing its analysis of pension freedoms data, while ‘insistent clients’ continues to dominate headlines.
These are the five most important things on the site during the last five days:
1) Insistent clients
This week, the Financial Conduct Authority revealed how providers are dealing with insistent clients, which showed that just 9 per cent of pension providers always accept pension transfers requests from these clients.
The FCA found that from a total of 107 responses, 61 per cent of pension providers said they will accept pension transfer requests from insistent clients “in certain circumstances” and 30 per cent refused to accept any transfer requests from clients who do not to listen to advice.
Meanwhile, the Personal Finance Society tackled the FCA, stating that it had to stop “dodging” the insistent client issue.
The regulator hit back, stating that it has outlined three steps that advisers should take when advising these clients. However, comments from FTAdviser readers seem to back the PFS, when shows how much distrust there is in the adviser sector of the regulator.
A final decision, published by the Financial Ombudsman Service earlier this year, also showed that the ombudsman will back financial advisers on ‘insistent clients’ as long as they follow the FCA’s guidelines to document that the client declined to follow the advice given.
2) Tax avoidance
In other news, it appears that ‘salary sacrifice’ is now labelled as ‘tax avoidance’, and therefore it should be abolished.
Charles McCready, programme director for The Savings and Investment Policy project, told FTAdviser that salary sacrifice is a ‘loop hole’ that is adopted quite widely and could be closed as a means of providing savings to the Treasury.
If it is to be withdrawn, then appropriate measures would be required to ensure that employees and employers do not find alternative means of resurrecting the arrangement in other forms.
However, advisers were quick to slam this proposal, with Malcolm Coury, managing director of Money Wise stating that it is a “ridiculous idea”.
He commented: “To abolish salary sacrifice would be short-termism to raise more for HMRC - pensions are long-term planning vehicles - stop tinkering with them and stop disincentivising savings.”
3) ABI loses another member
Aegon announced this week that it will leave the Association of British Insurers at the end of the year.
Chief executive Adrian Grace explained that looking ahead, it is entering “an exciting new era” with the government encouraging innovation as it pursues its radical modernising agenda to meet the needs and preferences of consumers.
This is likely to raise questions over membership benefits.
Last year, L&G quit the trade association and in 2008 Skandia left, stating that its business was not being aligned with most ABI members.
4) IFAs checking Pension Wise
In an evidence session with the work and pensions committee, FCA director of policy David Geale told MPs that the regulator has not used financial advisers to review consumer outcomes of those who use Pension Wise.