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Back to basics: FCA has written to chief executives asking them to review and improve retirement income advice services
The City’s watchdog has accused pension consultancies of “not even understanding the basics” in a scathing report that reveals some are putting their clients’ futures at risk.
The Financial Conduct Authority (FCA) has written to executives asking them to review and improve retirement income advice services.
Some of them fail to provide customers with appropriate information to make informed decisions about their future and make errors in basic calculations of future income.
The FCA’s Sarah Pritchard said some firms are making a real difference to their customers, adding: “Others don’t even get the basics right, putting customers’ futures at risk.”
In extreme cases, poor advice has led to customers losing valuable collateral and having to pay unnecessary fees.
In a letter to bosses, Lucy Castledine, director of consumer investments at the FCA, wrote: “Some firms may not meet the needs of their customers, which can lead to poor results. »
A review of responses from 1,000 firms praised some advisers but said others had not considered sustainable retirement income.
Rebecca O’Connor, of pensions company PensionBee, said: “If they don’t help you to be in a better situation than you otherwise would be, what are you paying for?
“One of the times in people’s lives where an independent advisor should really shine is when you’re about to retire.”