The Chancellor has stated there will be a review of the current exemption which exists in respect to employers promoting financial products to their employees.
As part of the review the Treasury has published a consultation document, Extending employers’ freedoms: A consultation on facilitating financial promotions in the workplace.
Among the proposals being put forward by the Treasury are that third party administators, which are not regualted by the Financial Services Authority (FSA), will be allowed to promote the pension scheme they administer.
The consultation document states the Treasury believes "it seems reasonable that where an employer has entrusted the administration of their company pension scheme to a third party and is content for that third party to act on their behalf for the purpose of issuing workplace promotions" then the exemption under Article 72 of the Financial Services and Markets Act 2000, (the Financial Promotion Order) - which exempts employers from restrictions on promoting a certain financial product over another - should be extended to include third party administrators.
The consultation paper also proposes employers should be allowed to promote various insurance products including group life cover, income protection cover, group critical illness, and group private medical insurance cover without “needing to consider whether those communications constitute financial promotions and without the employers needing to use an FSA-authorised person to approve or issue any promotions.”
The Treasury says such measures may improve the level of communication between employees and employers and may help employees to “form and voice their preferences about what types and levels of individual cover they would like to take out directly by themselves in order to complement any work-related group based cover provided by their employers”.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Matthew West on 020 7484 9893 or email [email protected].IFAonline
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