This is the final blog relaying my response to tRP’s and the FCA’s call for input on how standardizing the pensions consumer journey can help them improve things for the beleaguered saver.
The FCA and TPR have enjoyed an uneasy relationship over the years with tPR generally moaning that they get second class funding and second class billing. I remember visiting one of tPR’s MD in Brighton shortly after going to an FCA session at some party conference. The Director turned beetroot when he got to hear the FCA had been lording it on their manor when they had been banned from as much as attending.
As we all know, in this world it’s the Treasury that calls the shots because money talks and the DWP gets its money from the Treasury. The FCA is the Treasury’s baby and tPR is DWP’s. The sibling rivalry appears to be abating and some kind of peace has broken out. The question being posed has to be answered in the light of prior knowledge.
Are there areas of regulatory overlap between TPR and FCA causing problems for the consumer journey? If so, what would mitigate these?
The FCA and TPR rightly points out that the consumer is not overly concerned if their pension pot is contract based or occupational, personal or company and regulated by the FCA or TPR. What matters is the outcome of the pension saving, however it Is made.
The issue of regulatory overlap only matters when it comes to compliance for trustees, employers providers and advisers for whom the differences matter a lot.
By way of an example, a chair of one of the larger master trusts told a recent conference that she didn’t have to worry about value for money because she was asked to consider value for members. Value for money should be equally applicable to all pension savers but fiduciaries seem to think it is a matter of regulatory compliance rather than a means of understanding different pension pots with a common measure.
This sense of them and us is reducing. The FCA and TPR do genuinely look like they are working together rather than the token inclusion of the past.
There are differences in what can be done when operating occupational and personal pensions but these can be mitigated by working to a common goal. I would like to see the FCA’s duty of care being common to all retail savers which means any individual saving into a pension pot whether the pot be occupational or contract based, personal or workplace , FCA or TPR regulated. Such high-level duties must be standardised.
The consumer journey
- when to start saving
- how much to save
- which savings vehicle to use
- how and when to seek pension advice
- how and when to access their savings
Is the same, there may be nuances, such as the capacity of occupational pensions to pay scheme pensions which may require consumers to shift from one type of regulator to another but this should not be a matter of concern for the consumer.
In the wider context of the consumer journey, there is more that unites than divides and it is not regulatory overlap that should be of concern, but the lack of it. As regards providers, fiduciaries and employers, the key is the duty of care to savers and provided that is common to both regulators, it is hard to understand where there might be issues with having two regulators, or indeed why (in pensions at least), two regulators might eventually become one.