FT Adviser (07/02/2019) – The Financial Conduct Authority’s (FCA) proposed investment pathways could see advised clients be classified as non-advised and open up the gates for poaching, experts have warned.
As part of its Retirement Outcomes Review, the FCA proposed pension providers offered their non-advised customers a choice of investment pathways to meet their retirement objectives.
This was after it found many consumers were solely focused on taking tax-free cash from their pensions and were “insufficiently engaged” with deciding how to invest funds that moved into drawdown.
But the consultation paper published in January stated providers would need to treat consumers as non-advised if they make an investment decision more than 12 months after the transaction they had been advised on.
This will also be the case, within the 12-month period, if the client doesn’t confirm that their personal or financial circumstances have remained unchanged since receiving advice.
Alan Chan, director and chartered financial planner at London-based IFS Wealth & Pensions, said: “Providers may try to bypass the adviser and slot the clients into one of their ‘investment pathways’ instead.
“A client may feel that it is quicker to just do it non-advised via an ‘investment pathway’, rather than go through their IFA, without fully understanding the investment strategy and the impact it might have on their overall financial plans – as the investment solution is not personalised for their circumstances or, worse, may not suit them at all.”
Full article link: https://www.ftadviser.com/pensions/2019/02/07/fca-rules-could-lead-to-client-poaching/
