This isn’t a complicated requirement.
The adviser will have to identify the consumer objective and corresponding pathway, and put together their reasoning why their recommendation is superior.
But it is one that advisers have to be aware of and to build into their processes for drawdown recommendations from next August, and probably for Sipp recommendations in future years.
The publication of a charges league table may be another example.
Once investment pathways are launched next year there will be occasions where providers have to highlight the Money and Pensions Service’s drawdown comparator to consumers.
Likewise, all individual pension holders, whether advised or not, will be pushed towards a charges league table.
The FCA’s proposed changes to the non-workplace pensions market appear to be a fixed approach, and at the moment it seems doubtful whether the regulator will stray too far from the script it has adopted.
Financial advisers and planners need to be aware of the possible changes and what they mean for their clients and processes.
They also should be aware of the make-up of the individual pension market and which clients could benefit from switching to more modern contracts.
Rachel Vahey is a senior technical consultant at AJ Bell