Keith Richards – how the Consumer Duty applies to pensions.

Keith Richards who has established the Consumer Duty Alliance spoke and answered questions about how the Consumer Duty applied to an audience, primarily interested in workplace pensions. You can watch the session here or from .

Margaret Snowden led a series of questions focusing on the Consumer Duty’s relevance to those who manage occupational pensions.  She reported that at recent meetings she has had , many trustees remark on it being a retail duty that does not apply to institutional arrangements like theirs’s.

I followed up with a series of questions culminating in whether the Consumer Duty Alliance (CDA) had responded to the recent VFM consultation large parts of which deal with the Consumer Duty.

  • 29.FCA regulated providers will have an obligation under the Consumer Duty to consider the value of the pension products they offer, as well as other outcomes

  • 30. We consider that proposals for disclosure of VFM metrics and a more structured and comparable approach to VFM assessments by IGCs are consistent with the Consumer Duty and its aims of the setting higher and clearer standards of consumer protection across financial services and requiring firms to put their customers’ needs first. The publicly disclosed data and focus on pension saver outcomes will also support firms in meeting their obligations under the Consumer Duty.

  • 31. For workplace personal pension schemes specifically, the VFM assessments carried out by IGCs are embedded in FCA rules for the Consumer Duty. A provider must use its IGC’s VFM assessment in the provider’s own value assessment. Where a provider disagrees with its IGC’s assessment, the provider must explain why, and set how it considers that the scheme provides fair value, using the assessment framework for IGCs.

The CDA had not responded directly but Keith input through trade associations and told his audience he was going to talk to the FCA on how the Consumer Duty could apply here.

In my experience, the gap between advisory trade bodies and the organizations such as the PLSA and PASA that represent and set standards for occupational pensions has been part of the problem and it was good to have this discussion at this point.

And of course, most commercial pension operators are FCA regulated and have precisely the same issues as insurers and advisers who Keith has been used to dealing with when in charge of the Personal Finance Society.

By way of example, in this morning’s other blog , I explain how the payment of pensions to those so vulnerable that they cannot access their money using conventional or on-line banking can get paid through the Post Office. The Post Office is an authorised representative of the Bank of Ireland and has its own FCA registration. Many trustees will have members who need to use the Payment Exception Service – instigated by the DWP and operating through Post Office Counters for vulnerable customers who have no bank account. The capacity of Trustees to allow such cash withdrawals,  reflects on several aspects of the Consumer Duty – as well as the quality of service they are assessed for within the future Value for Money framework

Bridging the gap between institutional and retail

I have commented on this blog recently about the belief among some pension experts that their institutional world is inherently more valuable to the saver than the retail alternative.

This notion that institutional and retail pensions are different is a trope we really need to wipe out.

Large parts of the Consumer Duty rules explain how the consumer is at the end of every value chain. The fiduciary duty of any trustee is ultimately to the member of the scheme, it is hard to see how a trustee can avoid the responsibilities of the Consumer Duty and I hope in time the Consumer Duty will become the Fiduciary Duty.

For those wanting to find out more on this, the Pension Regulator’s feedback on the call for input from the Pension Regulator and FCA on the Pension Consumer Journey is an interesting starting point.








About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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