On the go: The Financial Conduct Authority has set out its second proposed package of remedies from its Retirement Outcomes Review, in a consultation on investment pathways, ensuring investment in cash is an active decision, and actual charges information.
An estimated 100,000 customers enter drawdown without taking advice each year. The FCA wants to introduce investment pathways designed to help these pension savers choose from four objectives for their retirement pot, and be offered a solution based on their choice.
Smaller drawdown providers will be able to refer savers to another provider or the Single Financial Guidance Body’s drawdown comparator tool.
Moreover, the watchdog has proposed rules that will require providers to give consumers a warning about holding investments in cash and to improve disclosure of charges. It has also proposed that savers’ investments are not defaulted into cash savings unless the customer actively chooses this option.
The FCA is going ahead with the rules and guidance information disclosure proposed last summer, including amending the information that is provided in the ‘wake-up’ pack given to consumers in the run up to retirement. These wake-up pack changes come into force on November 1 2019.
Changes that cover making the cost of drawdown products clearer and comparison easier will take effect on April 6 2020, subject to consultation.
