Two of the pensions industry’s largest organisations have caveated their broad support for the pensions dashboards project with concerns about timing, consistency and red tape surrounding financial advice.
In a consultation published in February, the Financial Conduct Authority proposed measures to be taken that will increase pressure on providers and advisers and ensure the products and services offer value for money.
The current implementation date for dashboards stands at June 30 2023 for personal and stakeholder pension schemes providers. Smaller providers and schemes, meanwhile, will have a transitional allowance that will offer a later implementation deadline of October 31 2024.
The Society of Pension Professionals and The Investing and Saving Alliance both expressed their support for the initiative in their responses to the consultation, which closes on April 8.
The SPP, however, flagged concerns regarding the timing and consistency of the project, suggesting companies be allowed to request a later implementation date.
Tisa, meanwhile, warned that rules around regulated advice will hobble the industry’s ability to issue guidance to consumers.
Industry will struggle to offer guidance
Tisa led its consultation response with its fears around the industry’s ability to guide customers.
“We are very concerned that the potential benefits to consumers remain severely hampered by existing advice rules,” its response, penned by its head of retirement Renny Biggins, read.
“This is because the industry will be curtailed in its ability to issue constructive guidance to consumers, be it nudges, alerts, prompts and suggestions, on the back of a consumer’s pensions dashboard data.”
These actions would constitute regulated advice, Tisa cautioned. It made the case for amending legislation around regulated advice to allow companies to provide consumers with ‘personalised guidance’.
“This will then allow the industry to ‘bring to life’ the insights to consumers about their pensions, which won’t otherwise be immediately obvious.”
FTAdviser reported in March that pension providers have called on MPs to change advice rules to allow them to offer more personalised guidance.
In evidence submitted as part of the Work and Pensions Committee’s inquiry into the impact of pension freedoms, Royal London, Aviva, Phoenix and Legal & General all called for a regulatory regime that can allow providers to tailor their support to people’s individual needs.
Tisa said it was discussing potential legislative and regulatory changes to the UK’s advice framework with both the FCA and the Treasury.
It added that “there remains general confusion within industry around which pension products are currently in scope and if so, when their staging date might be”, and demanded further clarity.
Requirements and deadlines could diverge
The SPP warned that the June 30 2023 implementation date for providers to have their dashboards fully operational, with connection to be carried out in a three-month window beforehand, “is extremely ambitious”.
The industry body warned that providers would find it difficult to comply with the deadline, as compliance depends on finalised rules and the Money and Pensions Service’s technical standards, the latter of which have yet to be consulted on.
It predicted that these were unlikely to be finalised before the end of 2022, along with the FCA’s final rules. It described the market for integrated service solution providers as one that is still developing, which will not mature before the implementation deadline.
The SPP also cautioned that the numerous bodies responsible for regulating the dashboards could lead to “divergent and inconsistent requirements, deadlines and goals”.
It suggested offering more flexibility through allowing companies to request an extension to the implementation deadline and encouraged the bodies responsible for the initiative to devise common requirements and objectives.
Sharon Piert, member of the SPP’s’ financial services regulation committee, said: “The Society of Pension Professionals remains very supportive of pensions dashboards. However, issues remain around the proposed implementation timeframe for the FCA’s new rules, alongside the danger of inconsistency with rules issued by other regulatory bodies.
“Offering flexibility to providers over the timing of compliance with the myriad of yet-to-be-finalised rules and ensuring consumers can benefit from consistent rules governing all dashboards is essential.”
Tisa echoed the SPP’s concerns surrounding timing, “given that final requirements will not be issued until autumn”.
It pointed to “the demand this will place on securing appropriate project resource and more generally the huge scale of regulatory change that industry is currently dealing with”.
The DWP and the FCA have been approached for comment.
Alex Janiaud is deputy editor at FTAdviser's sister publication Pensions Expert
