Breaking down the FCA's review of retirement income advice
The Financial Conduct Authority (FCA) has recently published its Thematic Review of Retirement Income Advice. This found both good and poor practices across the market. The review assessed how firms are delivering retirement income advice after pension freedoms were introduced in 2015; freedoms which gave consumers more choice and flexibility over how to access their pension savings.
What the review found
The review highlighted some areas where firms must improve their advice processes and outcomes. These include risk profiling, income withdrawals, disclosure of charges and tax implications, and ongoing reviews. It also identified examples of good practice where firms had adapted their services to meet the needs of clients in decumulation.
What to do next
If your firm provides retirement income advice, you'll need to familiarise yourself with the review's findings and take a look at your MI and data-collection processes to make sure you're complying with the FCA's expectations and standards.
To help you do this, we've sponsored the Consumer Duty Alliance’s summary guide to the Thematic Review. It outlines the main findings and recommendations and includes a link to the Retirement Income Advice Assessment Tool (RIAAT), which you can use to check the suitability of your advice files to identify any potential issues.
We've also worked with the Consumer Duty Alliance to prepare a handy best-practice checklist which you can use to audit your firm and uncover any areas where you might need to make adjustments.
The FCA will be following up on the findings of the review more generally with firms involved in the retirement income advice market, including carrying out supervisory work to explore the scale of the issues identified and tackle any harms. Our checklist will help you to enable the best financial outcomes for your customers.
Download the checklist PDF: 745KB
Also see
Webinar: Thematic Review into Retirement Income Advice – Breaking down what it means for you and your clients https://www.brighttalk.com/webcast/17001/615380?utm_source=article