Responding to the FCA consultation A stronger nudge to pension guidance, Aegon has warned the proposals are too skewed towards promoting Pension Wise and risk detracting from other forms of support, and in particular regulated financial advice, which might better serve customers.
Steven Cameron, Pensions Director at Aegon, says:
“While Pension Wise is an important service, offering valuable guidance to many thousands, the FCA proposals place too much emphasis on promoting Pension Wise guidance, rather than presenting this neutrally as one of a range of support options. We strongly believe the benefits of seeking regulated financial advice should be given at least as much prominence, with any guidance services offered by providers also signposted. This would allow consumers to make an informed choice based on their needs and the likely costs.
“Financial advice provides a much deeper support for a customer than Pension Wise guidance, including a personal recommendation. So it’s particularly controversial for the FCA to be proposing even customers who have already taken financial advice on retirement options to still be nudged to Pension Wise. In many cases, the adviser may be supporting the customer in implementing their decision to access. While customers can opt out, requiring providers to nudge to Pension Wise in these situations could be seen by customers as the provider questioning the adviser’s recommendation.
“We also believe firms can offer valuable ‘in house’ information and guidance support which can be designed and implemented to be impartial. Unlike Pension Wise, in house guidance from the pension provider can also help customers make the most of product features. We envisage more personalised guidance support becoming increasingly expected of firms under the FCA’s new consumer duty proposals and again should be signposted alongside the other support options.
“The FCA will be discussing findings with DWP as it in turn considers how to implement stronger nudges. With some individuals having both trust-based and contract-based pensions which they are accessing together, it would be particularly helpful if the requirements were fully consistent and implemented at a single point in time to ensure a joined-up customer experience.”
