With the first stage of auto-enrolment beginning this week, paraplanner John Jaffrey, of The Timebank, has outlined three things every adviser should know...
Jaffrey points to three changes outlined in Financial Services Authority (FSA) policy statement PS 11/8 on pensions reform, which can be read HERE.
Jaffrey explains that anyone advising on opt-outs from any pension being used for auto-enrolment will need to be regulated as a pension transfer specialist. This relates to the existing rule that anyone offering advice on occupational pension transfers requires specialist approval from the FSA.
Jaffrey said that key features document disclosure rules will not require a comparison with a stakeholder scheme, for a GPP being used for auto-enrolment.
Three auto-enrolment footnotes every adviser should know
Jaffrey said that advisers recommending additional contributions to individual pension arrangements must explain why any such plan is at least as suitable as making payments into a GPP being used for auto-enrolment.
Why is all this important?
As Jaffrey writes...
"Any client seeking pensions advice, who has access to a workplace GPP for auto-enrolment, will require an adviser to consider whether the workplace scheme should be utlisied instead of an alternative scheme.
"Many workplace GPP schemes that will be utilised for auto-enrolment are very competitive in terms of charges, fund choice and retirement option facilities, which may in turn make justification for not using it more difficult."
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