Instead, providers will be required to ask customers looking to access the freedoms or transfer whether they have received ‘appropriate pensions guidance or appropriate independent financial advice’.
Where the person indicates they have not received guidance or advice, the provider will have to:
Recommend they seek guidance or advice, and;
Ask the member whether they wish to wait until receiving guidance or advice before accessing their pot or transferring, or they which to proceed without having accessed it.
You can read the full amendment here: https://publications.parliament.uk/pa/bills/cbill/2017-2019/0131/amend/financial_rm_pbc_0125.1-7.html
Tom Selby, senior analyst at AJ Bell, comments:
“The original ‘auto guidance’ amendment was a bit of a dog’s breakfast. Automatically enrolling members into guidance for each transfer or every time they took money from their own pension pot – when they have already decided what they want to do – would have caused massive delays and huge complaints.
“Furthermore, it was by no means clear that it would have a material impact on the take-up of guidance. It therefore risked being both infuriating to customers and ineffective.
“The new amendment is a vast improvement and in the short-term should help increase awareness of the importance and value of advice and guidance. It also gives the FCA breathing room to consult on alternative nudges towards guidance that have been shown by research to be effective.”