Standards for Giving of Pensions Guidance by Designated Guidance Providers

FCA 2015/9

FCA 2016/80

 

Part 1 Definitions within the standards

Act

the Financial Services and Markets Act 2000 (as amended).

consumer

a person who is a recipient, or potential recipient, of the service.

delivery channel

any of the delivery channels through which the service is provided, including, telephone, online and face to face.

designated guidance provider

the meaning given in section 333E of the Act.

regulated advice

the activity specified in article 53 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.

service

the guidance service provided by designated guidance providers with the purpose of helping a member of a pension scheme to make decisions about what to do with the flexible benefits that may be provided to the member.

Part 2 The standards

Background

A These standards are set by the Financial Conduct Authority for the giving of pensions guidance by designated guidance providers.

The Financial Conduct Authority must set and monitor compliance with the standards and can make recommendations to the Secretary of State if it considers that a designated guidance provider has not complied with a standard.

Definitions

B In these standards, the definitions in Part 1 apply. Expressions which are defined in Part 1 appear in the text in bold type.

Application

C These standards apply to designated guidance providers in the provision of the service to consumers through any of the delivery channels.

The standards

Free at point of delivery

1 A designated guidance provider must not charge a consumer for the service

Delivering the guidance

2 A designated guidance provider must co-operate and work with other designated guidance providers to deliver the service in accordance with the standards.

3 A designated guidance provider must, by itself or, where appropriate, working with other designated guidance providers ensure that:

  1. (a) the delivery of the service is consistent across all the delivery channels under standard 19

  2. (b) consumers using the service are able to change to a different delivery channel

  3. (c) where consumers change delivery channels, duplication of the content set out in standard 20 is minimised, and

  4. (d) the service is accessible to consumers under relevant equalities legislation.

4 A designated guidance provider must ensure that the service is available to consumers in a timely manner.

5 A designated guidance provider must deliver the service with due skill, care and diligence.

6 A designated guidance provider must ensure that the service it delivers is of a good quality.

7 A designated guidance provider must not receive any financial or other incentive in connection with the service (other than funding under Part 20A of the Act).

8 When providing a consumer with information about their retirement options, a designated guidance provider may:

  1. (a) provide the consumer with information about particular types of financial products or services that may be relevant to those retirement options and the potential advantages and disadvantages of those options

  2. (b) refer a consumer to a directory or other list of financial advisers or providers of financial services or products

  3. (c) refer a consumer to their existing pension product provider where the consumer needs that provider to take action to implement one of the retirement options.

9 A designated guidance provider must not:

  1. (a) introduce or, explicitly or implicitly, recommend a provider of a financial service or product, or a financial adviser, except as set out in standard 8(b) or (c);

  2. (b) sell, arrange or facilitate the sale of, or explicitly or implicitly recommend, a financial service or product, except as set out in standard 8(a).

Professional standards

10 A designated guidance provider must ensure that its personnel who:

  1. (a) deliver the service over the phone, in person or through the internet, or

  2. (b) design or approve any processes, models or tools, including internet-based material, related to the service,

have the skills, knowledge and expertise necessary for the discharge of the responsibilities allocated to them.

11 A designated guidance provider must ensure that the personnel who are referred to in standard 10 have knowledge of:

  1. (a) the different types of pension schemes

  2. (b) the impact of fees and charges for both accumulation and decumulation pension products

  3. (c) the options available to consumers when accessing their pension savings

  4. (d) the factors relevant to the selection of options when accessing pension savings, including the impact of guarantees, special features, restrictions or conditions, protected rights, and exit charges

  5. (e) the tax treatment of pensions and income generally

  6. (f) the circumstances when a consumer may require further specialist help, for example debt advice, or regulated advice

  7. (g) other issues that are relevant to consumers considering their retirement options, for example long-term care needs, sustainability of income in retirement and life expectancy, and

  8. (h) the conduct that a designated guidance provider may or must not engage in under standards 8 and 9, respectively.

12 A designated guidance provider must ensure that the personnel referred to in standard 10(a) have good interpersonal skills, including listening and verbal communication skills.

Communications

13 A designated guidance provider must consider the information needs of consumers using the service and communicate information to them in a way that is clear, fair and not misleading.

Systems and controls

14 A designated guidance provider must establish and maintain such systems and controls that are appropriate to ensure compliance with the standards and its operations more generally, including the protection of consumer information under legislation including the Data Protection Act 1998 and the Computer Misuse Act 1990.

15 A designated guidance provider must arrange for orderly records in its provision of the service, which must be sufficient to enable the Financial Conduct Authority to monitor the designated guidance provider’s compliance with these standards, to be kept for a period of five years.

Complaints management

16 A designated guidance provider must ensure that consumers have access to a complaint management system that fairly, consistently and promptly investigates complaints arising in connection with the delivery of the service by the designated guidance provider.

17 A designated guidance provider must ensure that:

  1. (a) consumers are informed of the availability of the complaint management system, and

  2. (b) details of the complaints handling procedures are made available to consumers on a website, with copies supplied to consumers who request them or make a complaint.

18 A designated guidance provider must ensure that a record of each complaint received and the measures taken for its resolution is kept and retained for at least five years from the date the complaint was received.

Content of the guidance session

19 (a) Designated guidance providers must work together to establish a consistent process for delivering the content of the guidance session, including the content specified in standard 20.

(b) A guidance session may consist of one or more appointments.

20 A guidance session must do the following:

  1. (a) inform consumers of the scope, purpose and limitations of the session

  2. (b) inform consumers about the pension entitlement and other personal and financial information that the designated guidance provider may request from them during the session

  3. (c) request information from the consumer about their accumulated pension pots, including the information specified in Part 3

  4. (d) request information about the consumer’s financial and personal circumstances that is relevant to their retirement options, including the information specified in Part 3

  5. (e) alert the consumer to other sources of information and advice as appropriate and at relevant points during the session

  6. (f) identify for the consumer and provide them with information about:

    1. (i) the options relevant to the consumer

    2. (ii) to the extent that they are relevant to the consumer’s options, the factors in standard 11(d) and the other issues in standard 11(g), and

    3. (iii) the potential tax implications and/or debt obligations

  7. (g) set out the next steps for the consumer to take under standard 21, and

  8. (h) provide consumers with a record of their guidance session in accordance with standard 23.

Next steps

21 At the end of the guidance session, a designated guidance provider must:

  1. (a) subject to standard 9, refer the consumer to relevant sources of further information, guidance, specialist advice, regulated advice, support tools or directories

  2. (b) draw the consumer’s attention to the importance of shopping around when making decisions about retirement options, and

  3. (c) draw the consumer’s attention to the potential tax implications and/or debt obligations under standard 20(f)(iii) and refer them to support services, as appropriate.

22 A designated guidance provider must ensure that sources of further information, guidance, specialist advice, regulated advice, support tools and directories referred to in standard 21 have been periodically assessed to be of a good quality.

Record of guidance session

23 A designated guidance provider must provide a consumer with a record of the guidance session in the standard format set out in standard 24.

24 Designated guidance providers must work together to agree a standard format for providing records of guidance sessions which includes the following:

  1. (a) information provided by the consumer during the session which is relevant to the service

  2. (b) the options discussed with the consumer

  3. (c) the factors relevant to the exercise of the consumer’s options, as identified during the session

  4. (d) sources of information or specialist advice

  5. (e) information on how to shop around for any products that are relevant to the consumer’s retirement options, and

  6. (f) a statement that the consumer is responsible for any decisions they make.

Part 3 Relevant information

This Part relates to standard 20.

1 Information about accumulated pension pots

1A Relevant information from the consumer about their accumulated pension pots includes information about:

  1. • the sum of money that will be available to exercise options in retirement

  2. • whether any guarantees apply

  3. • any benefits, exit fees and ongoing charges

  4. • any other relevant special features, restrictions, or conditions that apply, such as (for with-profits funds) any market value reduction conditions in place, and

  5. • any other information relevant to the exercise of the consumer’s options

2 Relevant information about the consumer’s financial and personal circumstances includes the following.

2A Financial information

  1. • spouse/partner’s pension pots or benefits and other income

  2. • current and future sources of income

  3. • capital expectations

  4. • tax status

  5. • entitlement to state benefits (current and future)

  6. • home owner or renting

  7. • debt position

2B Personal circumstances

  1. • dependants

  2. • spouse/partner

  3. • state of health

  4. • potential long-term care needs

  5. • the consumer’s plan and objectives for retirement, to identify retirement income needs