accelerated drawdown - " regulatory risk"

atush

Go to someone who will? Like DIY?

But even then w/o advice on a DIY basis complaints have been made and upheld.

This is going to be a Very big problem going forwards.

zagfles

dunstonh wrote: »

The FSA went against the Govt a number of times. It was accused on a few occasions of sticking its fingers up at the Govt.



Unfortunately, facilitating a transaction that you believe to be wrong can leave you culpable for it. There are areas where you may put a client down as insistent but there are also higher risk areas (i.e. where there are likely to be complaints) where firms will not transact on execution only or insistent client basis.

Whilst consumer protection is a good thing, it does get rather silly at times. And the consumer is just as greedy as many would accuse financial companies of being. Cold call someone saying they could get compensation and many are happy to put in a fraudulent/try-it-on complaint telling a bunch of lies just hoping that one may stick. This is a claims company wet dream They can cold call people and ask them if they have an annuity with their pension. if yes, they can put in a mis-sale complaint stating they were better with alternatives. If no, they can put in a mis-sale complaint saying that annuity was better given its security.

The govt have clearly stated they are relaxed about people blowing the lot and living on the state pension, so they'll have to sort the regulatory environment out to allow it, and to allow companies to facilitate it. Otherwise we may as well go back to compusory annuities. Perhaps you should respond to the govt consultation?

bmm78

dunstonh wrote: »

The FSA went against the Govt a number of times. It was accused on a few occasions of sticking its fingers up at the Govt.

Has there been any official word from the FCA as of yet? Apparently they weren't consulted prior to the changes, which if true is ridiculous as the consultation paper has tasked them with helping to deliver an effective guidance system within the current regulatory framework, presumably to have everything in place within 12 months.

The consultation paper gives the impression that they do not fully (or even partially) understand the regulatory issues. They have suggested exploring measures to make regulatory advice more affordable through the development of online delivery channels. This shows a misunderstanding of what the costs are of regulatory advice, both tangible and intangible. It isn't the medium used to deliver the service that costs, but the costs of developing and maintaining level 4 advisers, training and competence, demonstrating suitability, compliance monitoring, PI costs, etc. You can streamline a sales process to fit in with simplified advice requirements, but you can't streamline the firm's regulatory obligations and the potential liability of advice.

bmm78

zagfles wrote: »

The govt have clearly stated they are relaxed about people blowing the lot and living on the state pension, so they'll have to sort the regulatory environment out to allow it, and to allow companies to facilitate it. Otherwise we may as well go back to compusory annuities. Perhaps you should respond to the govt consultation?

Agree that there needs to be an alignment between government and regulatory policy, but unless FSMA is reformed the FCA are free to regulate as they see fit to meet their statutory objectives. The most relevant of these is the statutory objective to "secure an appropriate degree of protection for consumers". If the FCA consider for example that certain transactions should only be completed with advice in order to protect consumers, they are within their powers to impose this.

Triumph13

Maybe we can put the FCA in charge of providing the free consultations and then they can find against themselves?

dunstonh

Triumph13 wrote: »

Maybe we can put the FCA in charge of providing the free consultations and then they can find against themselves?

Wouldn't work. The high court ruled a few years back that the FSA has the power to retrospectively change rules. So, it would just move the goal posts to suit its position.

dunstonh

Has there been any official word from the FCA as of yet? Apparently they weren't consulted prior to the changes, which if true is ridiculous as the consultation paper has tasked them with helping to deliver an effective guidance system within the current regulatory framework, presumably to have everything in place within 12 months.

FCA is quiet. However, that is to be expected i suppose. Although an initial "we are looking at it" would be nice. I too have heard they were not consulted. However, why would they need to be. It isn't their decision or remit. Many felt the FSA got too big for its boots and is in part responsible for the situation where setting up investments and pensions requires far more time and paperwork than taking out a loan. You could probably take out 20 Wonga loans in the time it takes to buy a pension.

gadgetmind

dunstonh wrote: »

FCA is quiet.

Yes, far too quiet, which is disturbing. The drums will surely start again soon.

boglehead

gadgetmind wrote: »

I think this is all a storm in a teacup. People have always been free to blow ISAs, inheritances, insurance payouts, PCLS, anything they like, so now we just add pension savings to the list.

Other countries have been able to draw on pensions like this for decades, and the world hasn't ended, so what's new?

110% with you on that one gadgetmind. :T