This morning’s release of a Feedback Statement by the Financial Conduct Authority (FCA), which focuses on non-workplace pensions (NWPs), aims to reduce the complexity and increase the transparency of charging structures between different pension products. The FCA’s “Effective competition in non-workplace pensions” Feedback Statement risks giving consumers the price of everything and the value of nothing, says James Jones-Tinsley, Self-Invested Pensions Technical Specialist.
James Jones-Tinsley said: “The FCA suggests one way to achieve effective competition in NWPs is for them to collate providers’ charging data into a publically available dataset.
"As a leading SIPP operator, we have two main concerns with this proposal."
“Firstly, the FCA is a regulator, not a data provider. It should stick to being a regulator and focus on the functioning of the market and encouraging competition and innovation. There are plenty of other independent data providers already in the market.
Secondly, an isolated focus on charges risks consumers not considering the many features and benefits of a pension product, or of the quality and service standards of the pension provider. Nominal pricing within pensions has been on a downward trajectory over recent years, and so in real terms, pension providers have delivered cost-savings from their ongoing developments, without regulatory enforcement.
If the proposals are introduced as set out within today’s Feedback Statement, consumers will end up understanding the price of everything and the relevance of nothing.”