Providers and the Financial Conduct Authority have come under fire after the regulator announced it has warned a number of companies over potential breaches of competition laws in their pension product distribution arrangements.
The action, the first time the FCA has published letters of this nature, is similar to the Competition and Markets Authority’s practice of sending warning letters, placing a responsibility of the recipients to confirm what action they plan to take.
However the FCA has come under criticism for not specifying how many or which providers it has concerns about.
Colin Rodger, director at Alexander Sloan Financial Planning said: “The story is meaningless without the FCA being open about which companies are involved and what they are supposed to have done. Otherwise there is no point in making an announcement.”
Representatives from the regulator have met with the firms to further understand the arrangements in question, the FCA said.
Kim Barrett, independent financial adviser at Barretts Financial Solutions said issues with providers were widespread in his experience.
“Given the problems we continually have with product providers I am surprised that any of them have the intelligence to act within the rules.”
The FCA said that as a result of its actions, the providers have undertaken a number of initiatives to strengthen competition compliance.
These include reviewing and self-assessing the arrangements in question, as well as other similar arrangements that they have in place, as well as reviewing and updating their compliance protocols.
Finally, the actions also included ensuring that all key staff receive competition law training and that this is regularly reviewed and updated.
The FCA notice read: “We would encourage other firms to review their distribution and marketing arrangements to ensure that they comply with competition law.
“In particular, when engaging with actual or potential competitors, firms should take care not to disclose any commercially sensitive information.”