More MMR, pension policy and Sipps: the week in news

More MMR, pension policy and Sipps: the week in news

Responsible lending reviews, pension legislation reassessments and more work for the ombudsman were among the biggest themes this week.

For a top-level round-up of what happened this week in the adviser industry, look no further:

1. Mortgage Market Review 2.0

Article continues after advert

On Monday, the Financial Conduct Authority dropped the results of both its call for input and responsible lending review, giving the industry fairly good marks on its clean-up since the MMR, but also opening the door for more consultation.

Sometime towards the end of the year, the intermediary side of the market will have to face questions on what its rise to dominance really means for borrowers and how the proliferation of technology can guide them to the right deals.

The FCA’s director of competition Deborah Jones also warned plans are underway to crack down on “the web of relationships” that exists within lender panels and mortgage sourcing systems, which risk “conflicts of interest or misaligned incentives”.

The Association of Mortgage Intermediaries’ chief executive Robert Sinclair hit back at the regulator, pleading for the “fragile” sector to be left alone for once.

2. Pensions policy in the spotlight

Yesterday, FTAdviser revealed plans for a radical new bill, which could see defined benefit pension scheme members face cuts to their promised retirement incomes, according to Work and Pensions committee chairman Frank Field.

He argued many final salary schemes may never meet their liabilities, and must adjust them to more realistic levels, with the Labour MP promising a “mega bill” to deal with DB deficits, alongside policies to prevent companies paying out dividends at the expense of their employees’ pension schemes; reacting to the recent BHS debacle.

Meanwhile, a Freedom of Information Act request from FTAdviser shed new light on how changes in adviser population over the last decade have impacted the industry’s readiness for government pension legislation.The figures showed three-quarters of advisers have left since A-Day’s pensions simplification regime came into force in April 2006.

One of the biggest problems since last April raised its ugly head again this week, as an adviser raised TCF concerns about the charges levied by closed book life company Phoenix Life on scheme members trying to transfer their pots out to take advantage of the at-retirement reforms.

3. Ombudsman stands firm

Onto another pensions problem, with the Pensions Ombudsman cementing its position that Sipp providers should not be expected to carry out comprehensive due diligence on pension investments.

Ombudsman Anthony Arter found in favour of Stadia Trustees in a complaint, deciding it was not their role to undertake the level of due diligence suggested, reflecting a previous decision where he controversially ruled it was not Berkeley Burke’s responsibility to conduct extensive investigations into the suitability of investments.

Meanwhile, over at the Financial Ombudsman Service, a decision saw an adviser criticised for recommending a client with a cautious attitude to risk put £210,477 of their pension savings into the unregulated New Earth Solutions Recycling fund, via his Sipp.