PensionsMar 26 2018

Providers tight-lipped on FCA 'free' tools intervention

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
Providers tight-lipped on FCA 'free' tools intervention

Providers offering transfer value analysis services have said they are considering the impact of today's Financial Conduct Authority paper.

The FCA has published a policy statement on advising on pension transfers which said it was "unlikely" that providing or accepting free software to provide transfer value analysis would fall within the regulator's inducement rules.

In the policy statement the FCA also said it would proceed with its proposal to require that all advice on the transfer and conversion of safeguarded benefits should include a personal recommendation.

Elsewhere it scrapped its plans to change its assumption that defined benefit transfers are usually unsuitable.

But the policy statement also said: "Where platforms or providers make free software available to advisers, firms should be aware of our rules on accepting benefits from providers.

"We have modified the rules and guidance on inducements for non-Mifid business to mirror more closely the new Mifid II inducement rules. This means that non-monetary benefits which were previously not included in the inducement rules are now included.

"We consider it is unlikely that providing or accepting free TVA or Apta software would fall within the narrower definition and so should not be used. As a result non-monetary benefits which were previously not included in the inducement rules are now included."

Among the providers and platforms which currently offer TVA services are Prudential, Scottish Widows, Selectapension and Novia.

A spokesman for Prudential said: "We are currently working though the details of the paper and it’s too early to say when and what actions will be taken. Prudential will, of course, comply with any new requirements outlined by the regulator."

Pete Glancy, head of policy at Scottish Widows, said: "Pension transfers is a very complex area where protections and potential benefits need to be carefully assessed. We are working our way through the full statement; if any changes are required, our core focus will be on continuing to best serve our customers."

A spokesman for Novia said: "We are assessing the situation, there are a number of new requirements for TVAS. In principle our intention would be to continue to offer a service if appropriate."

Selectapension said it would be unable to comment.

Peter Matthew, managing director of Jackson Wealth Management, said: "Calling it an inducement might be a bit harsh but it smacks a little bit of asking the provider for everything rather than stumping up for a decent bit of software. It is always going to be a bit suboptimal."

Dan Farrow, director of SBN Wealth Management, said: "There is no reason why a firm active in this market shouldn't buy some software and do it in house. They are not owning the process and that in itself is a risk."

damian.fantato@ft.com