The pensions minister’s complaints, the regulator’s bans and the government’s clarifications all dominated this week’s news agenda.
So those three and a couple more main themes from the last five days in this industry, will now be condensed and recapped for your reading pleasure:
1) Ros speaks out
Choosing to ignore her current troubles with a certain demographic of women angry about their state pensions, the minister for pensions Baroness Ros Altmann spoke out this week on several other issues impacting the industry she presides over.
On Monday she came out in defence of the auto-enrolment promotion tool and much-derided furry monster ‘Workie’, which she claimed had so-far been “very successful”.
In an exclusive interview, Baroness Altmann pointed out her creation was “meant to be eye catching” and to be fair to her, the fact that we’re all still talking about ‘it’ means that the campaign is doing a darn sight better than Theo Pathetis and Karen Brady could manage.
Also cut from the same chat with FTAdviser was the perhaps more pressing issue of providers not being as clear as they should be in retirement wake-up packs.
Speaking from personal experience, Ms Altmann complained that these documents often mis-lead savers into thinking providers offer financial advice and consistently they do not do enough to point people towards the government’s free guidance service.
Our editor Emma Ann Hughes suggested this is something the regulator should be cracking down on.
Finally, at a trade union conference on Wednesday, Ms Altmann took on one of her predecessors many plans - that of pension ‘auto-escalation - suggesting the government was already conducting a “mini experiment” by aligning auto-enrolment scheme contribution increases with changes in the tax year, so people were less aware of the extra burden.
2) Another busy week for the FCA
Much like any ageing celebrities, the City watchdog will have been pleased to get through a depressing January relatively unscathed, but February hasn’t started that well for it.
The week and month began with back-bench MPs airing their views on the Financial Conduct Authority - at length - in a lively House of Commons debate on its very future.
Thankfully for the regulator, in the end, economic secretary to HM Treasury Harriett Baldwin said while it certainly has a challenging remit, the motion of no confidence was “neither well founded nor well timed, given that a new chief executive and a new team are in place”.
The following day, FTAdviser reported on another scrap of egg for the FCA to scrape off its face, in the form of an admission that its definition of third way annuity products was wrong.
In its September report on pension freedom collection data, the regulator defined them as ‘all products with some element of guaranteed minimum income’, but in response to provider feedback, the FCA helpfully clarified there is no industry agreed description and different firms will have different views.
Then on Wednesday (3 February) it was back to the business of regulating, with a proposal that consumers looking to use the incoming Innovative Finance Isa for certain peer-to-peer lending should receive information on the potential tax disadvantages of the loan not being repaid.
Crucially, the report also suggested applying rules banning the payment or receipt of commission by firms in relation to recommendations involving advice on P2P agreements.
3) DWP tinkers
The Department for Work & Pensions also stepped into the breach this week, firstly providing further guidance for providers on which pensions with a guarantee are safeguarded for the purpose of advice.
Intended to help determine whether certain types of pension benefits which contain a promise, including those with a guaranteed annuity rate (GAR), are protected, it also detailed when the exception to the requirement to take independent advice for those with pots worth £30,000 or less applies.
It followed this by publishing information for advisers with clients who divorce after 6 April, warning they will find their state pensions divvied up under a new regime.
Under the new rules, pension sharing orders in England, Wales and Scotland will be required to specify a percentage of the weekly amount of protected payment and not its cash equivalent value.
4) Ambulance chasers become the chased
A bit of schadenfreude this week, as despite fresh concerns being raised about claims management companies re-training their sights on advice complaints, one firm went into administration and another suggested its peers couldn’t cope with the increased complexity of moving on from PPI.
Even though Regulatory Legal’s Gareth Fatchett claimed that step up was proving to be un-economical for many ambulance chasers, the story did see some strongly-worded comment from advisers, concerned about the impact spurious claims submitted to the ombudsman are having on their time and resources.
West Riding Personal Financial Solutions managing director Neil Liversidge was particularly forthright, comparing false claims to muggings, before declaring: “The last mugger who unwisely tried rolling me found his head introduced to the pavement about half a second later.”
5) Protection product rumble
The protection insurance market is not renowned for its drama, but this week a fight erupted, as Legal & General disputed Aviva’s claims to be shaking up the sector with a new product.
The rival provider said it would raise tax concerns with HM Revenue & Customs, but the government department declined to comment on the “Mickey Mouse” critical illness update.
