This month we bring you the best bits from various regulators' speeches about the future regulatory model, improvements for standards in financial advice and what’s next for the FCA-Pensions Regulator joint strategy. Read on also for rumours of changes to the rules for unit-linked funds and new rules for non-UCITS retail schemes.

A year of comradeship

Deb Jones, the FCA’s Director of Supervision, Life Insurance and Financial Advice, gave a speech at an event that the FCA and the Pensions Regulator were co-hosting.

The event looked back over the past year of the regulators’ joint regulatory strategy. Along with that strategy, Jones outlined some other things that are taking place in the pensions and retirement income sector.

She mentioned the idea of asking the public how advisors should manage and give pension transfer advice, particularly for DB transfers, and whether there should be a ban on contingent charging. She also thought that the FCA/TPR might consult the public about the role of Independent Governance Committees (IGCs) in ensuring that members of workplace personal pension schemes were receiving VFM.

The FCA and TPR have been doing various things to fulfil their joint strategy, notably regarding pension freedoms and particularly defined-benefit transfers. Jones mentioned these.

The FCA has reviewed the advice that consumers have been receiving and found that only half of it was suitable. Unsuitable advice regarding DB transfers has led to losses of about £1.6 billion to £2 billion per year, so Jones reminded the audience that this issue was not confined to a few firms. Though it is in the interests of most consumers to stick to their DB schemes, 60% of firms advised at least 75% of their clients to make transfers.

The regulator has been visiting the most active firms in the market and will continue to do so for the rest of 2019. It will also be contacting firms whose DB pension transfer advice has shown the potential for harm. Depending on the outcome of those assessments, the FCA is thinking of extending its assessments to include a wider range of firms next year.

Jones said that DB pensions will continue to be a priority for the regulator next year and that it will not stop until advice in the pension transfer market has reached an acceptable standard.

In other areas, the FCA and TPR are thinking of doing more collaborative work on 'VFM,' value for money. Next year they will consult interested parties about a definition for this phrase and discuss principles and standards.

Jones also said that it was impossible to over-emphasise the FCA's enthusiasm for encouraging innovation in all sectors. Her organisation wants to ensure that innovation (a word that regulators often use when talking about IT) benefits consumers by giving them better access to products at lower prices, and by spawning products that are more suited to customers' needs.