AgeWage, a defined contribution comparison service, has resigned its permissions to act as an introducer of regulated business and is no longer regulated by the Financial Conduct Authority.
The firm, which was co-developed with the Morningstar UK Pensions Index in 2018, said this ends a four year experiment which started with its work in the FCA Innovation Sandbox to test its value for money scoring system.
The sandbox research suggested that people found knowing the value they got for their money helpful and that it would help them make decisions on consolidation.
However, AgeWage said it has not monetised its capability and it now receives revenues from activities that do not need the firm to be regulated.
In a blog post, Henry Tapper, founder and executive chairperson of AgeWage, said: “There are some fundamental costs of regulation which were holding back our business from expanding as we wanted.
“We also found that being regulated was requiring us to commit to disclosures that were confusing our customers.
“Put simply, we weren’t selling them anything but were being regulated as if we were.”
He explained that AgeWage has a duty to its consumers and it will continue to operate the principles of the FCA’s consumer duty, with the same endeavour as before.
However, the firm has detached itself from “what appears to be less of a cottage industry and more of a 'shopping mall' of consumer duty compliance”.
“When you find yourself going through the motions with no-one to practise your consumer duty on – you realise you are in the wrong regulatory space,” he said.
AgeWage wants to move on and become a solutions provider to the problems of the occupational pensions industry.
Tapper said the firm’s “spur” is the Mansion House reforms, the charger is the risk-sharing it encourages.
The firm will remain close to the FCA and Tapper described it as a “progressive regulator” which has shown AgeWage "much care and attention".
Tapper explained that AgeWage was not getting value for the money it was costing to be regulated by the FCA and regulation for his business was a luxury not a necessity.
“We are interested in what can be done within the occupational pension space and particularly how we can help turn pots to pensions without burdening savers with unwanted choices,” he told FTAdviser.
“We recognise that the plans we had in 2018 have changed with markets and we change with it,” he said.
“So if you don’t see on our headers and advertisements, reference to AgeWage’s FCA registration, this is why.”
sonia.rach@ft.com
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