Digital innovation offers new opportunities to support customers, particularly if they do not have the benefit of an adviser to help them understand and choose from the new retirement options.
The FCA recognises that the pension freedoms may have influenced business models – either leading to providers offering a wider range of decumulation options or to specialising in certain options. This can create competition concerns, particularly if new ‘challengers’ find it hard to achieve viable scale.
Finally, the FCA is asking if its regulation is harming competition, discouraging firms from entering the decumulation market or from innovating. In particular, it asks if any of its regulations are disproportionately expensive compared to the issues they are seeking to address.
In conclusion, pensions are, as the FCA says, of fundamental social importance, and appropriate regulation in support of government policy and consumer choice has to be a good thing, but it is far from easy. I have always thought that the FCA should take the lead in setting out a clear picture of all the different pensions initiatives and how they all fit together. The ROR terms of reference are a step in that direction, but we are not there yet. It is always easier to complete a jigsaw if you see the picture on the box.
Steven Cameron is pension director of Aegon
| Key Points |
The FCA has published its Retirement Outcomes Review to look at market developments in pensions. EU regulations will continue to apply at least until we formally exit the EU. There is a significant increase in non-advised drawdown sales. |
