Yet more final regulations have been issued for stakeholder pensions, the latest centering on the so...
Yet more final regulations have been issued for stakeholder pensions, the latest centering on the sometimes controversial decision trees. In the past two years there seems to have been an endless stream of consultation, regulation and then amendments to regulations for all the various areas that stakeholder encompasses.
Intermediaries have been bombarded with new rules and requirements and changes to the way in which they practise. Decisions trees were supposed to be the least complicated of the measures and yet these threw up a storm of debate over what role these would play in the selling of stakeholders, how qualified one would need to be to assist a consumer with the tree, and where it would actually be made available.
Intermediaries must have given a sigh of relief when the final decision tree rules were unveiled last week.
While the trees look simple enough, they are accompanied by pages and pages of solid text explaining what pensions are about and what issues the consumer needs to be concerned about. Then there are four trees, one of which is simply a list of where to find help if you can't figure out any of the other information provided.
The kicker is that the FSA has washed its hands of culpability concerning the end result of the trees themselves. If someone comes to the wrong conclusion using the trees and mis-buys a pension, then they can't blame the FSA. This may lead to pension buyers accepting the sole responsibility for any mis-purchase of a pension. In the end this can only help IFAs as there are likely to be a few consumers and employers who are a bit wary of accepting full and utter responsibility for their own decisions, especially in the pensions world.
The FSA has also cut down on the workload and uncertainty that the previous drafts of decision trees would have given to intermediaries. The original requirement for IFAs to do a full fact find and then give clients a decision tree would only have been detrimental to the intermediary community. If the tree, which is designed to be generic, had come out with a different conclusion than a fact find then consumer confidence in intermediaries might have been hurt.
Whether or not stakeholder pensions are a successful product for IFAs, or even for the public in general, the recent moves by the Government have at least given IFAs more breathing space and, potentially, a more valuable position than the original proposals dictated.
Decision trees are not making pensions simple for the public, or intermediaries, but at least a scaled back version makes life less difficult than it might have been.
Partner Insight: Continuing the Architas education series for clients.
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