The FSA's move yesterday to persuade consumers to reassess the contracting in or out status of their pensions has prompted comment from one IFA who questions whether the City watchdog is setting advisers up for another fall.
John Nightingale, principal at Personal & Corporate Financial Planning says:
I see the FSA have issued guidance regarding contracting in or out of S2P. It appears that the FSA guidance, to those who are currently contracted out, is that they should seek guidance on whether they should remain contracted out.
”Call me cynical but it appears to me that the FSA are sitting on the fence somewhat and expect us, the IFA community, to provide the guidance.
”As the FSA is the industry regulator, and ultimately decides what is right or wrong (in some case many years down the road) you would expect them to have some sort of view. Or perhaps they are relying on the fact that some of us will make the wrong call, and we can have another witch hunt - sorry, review - which will keep them in work and hit us with ever increasing fines.
”How on earth can anyone make the correct call, when a future government can completely change the rules? If a future government scraps S2P because they decide it is unaffordable, and we advise contracting out, well that's a good call.
”But if they double it, for instance, and we advise contracting out, well that's a bad call the response will be ‘Sue the evil IFA!’
”If the FSA isn't sure, how can we be expected to know?”
'Necessary steps' taken
Penalty payments and enforcement policy
Fees as low as 0.04%
Only 9,486 applied for the benefit in 12 months
Women and young people adversely affected