AJ Bell press comment – 1 December 2022
- FCA publish new consultation paper on regulatory framework for pensions dashboards services (PDS) firms (CP22/25 – Proposed Regulatory Framework for Pensions Dashboards Services firms (fca.org.uk))
- Firms will need to have specific FCA permissions to become a PDS
- New rules will govern interactions with users and how information must be displayed
- Rules will allow information to be exported out of the pensions dashboards environment to the user or to the PDS firm, who can provide ‘post-view’ services to help users decide what next to do
- Users will be able to delegate access to their financial advisers or MaPS guidance specialists
Rachel Vahey, AJ Bell head of policy development, comments:
“Developing robust and useful pensions dashboards has been a massive project for government requiring much resource and time. To be a success, though, means people have to use them. Just having one single dashboard run by the Money and Pensions Service (MaPS) was never going to achieve wide-spread appeal. Instead, government is putting its faith into building a network of different and varied places where people can access a dashboard and search for lost pensions.
“Current FCA regulated firms – such as SIPPs and financial adviser firms - can apply to become a PDS, as well as pension schemes which are regulated by the Pensions Regulator (TPR), such as master trusts. But employers and charities, may also want to apply for permission. All will have to follow FCA rules including giving users the right information in the right way and within set timescales. This includes warnings and signposts to help them understand the information they have been given.
Exporting data
“The FCA recognises giving information to people is only the first step. If they are to improve their retirement saving prospects, users also have to do something with that information. Importantly, users will be able to delegate access to their information to their financial adviser or a MaPS guidance specialist, to help them formulate plans.
“But users will also be allowed to export information about their pensions – such as pot size and projected income – from the pensions dashboard environment back to themselves, or to the PDS firm.
“The PDS firm can then offer the user ‘post-view services’ to help them understand their pension position and what they can do next. This could be giving them investment advice, showing what happens if they increase their contributions, or if they consolidated their pension plans into one place. Although the data cannot be used to pre-populate an application form.
“This will elevate pensions dashboards from being merely a static source of information to an interactive service that helps people engage with their pension saving and plan for the future.
High standards
“The FCA is demanding high standards from PDS firms. It will keep an eye on firms through its own monitoring as well as information received from MaPS. In addition to following strict rules when exporting data, PDS firms will have to follow the pensions dashboards standards and display signposts and warnings every time a customer uses a dashboard service. However, firms will have the freedom to format these messages in the best way to suit their customers, in line with Consumer Duty principles.
“PDS firms will also have to conform to the FCA’s Senior Managers and Compliance regime.
“The Pensions Dashboards have been a long time coming, but in less than two years they will be here. The government is placing a lot of faith in them revitalising the nation’s engagement with pensions, and these FCA rules show how that can be achieved.”
