The FCA published policy statement 15-04 on Friday.

The original document is available here.

The regulator has used its statutory powers to impose (what look like sensible) rules with immediate effect and without consultation, however a formal consultation process is promised for later in the year.

So, “what is it about?” we hear you ask:
Well, it seems that the world’s most powerful regulator is a little less convinced than Her Majesty’s Government that Joe Public is wise enough to not squander his pension too quickly. A view which won’t be alien to anyone who deals with “clients”.

The FCA is requiring all firms (providers and advisers) to ensure that consumer detriment doesn’t happen through ill informed decisions. Specifically the risks of pension-pillaging need to be explained to each consumer in terms which relate to their own circumstances. In it’s wisdom, the FCA even apply this requirement to execution only arrangements.


In practice this means that everyone who wants to get at their pension fund will need to answer questions about their circumstances so that personalised risk warnings may be given. That means advice.


However, from a family law point of view this may not help. Family Lawyers should be encouraged to ensure their client receives financial advice during the negotiating stage of Ancillary Proceedings. Negotiating a deal based on one party being able to access their pension fund is likely to leave egg on the face. Why? because if your client is going to have to have advice, the chance of an adviser recommending a solution which is to the detriment of your client’s long term retirement is now close to zero, and ‘no advice’ is looking a lot like ‘no transaction’.

NOTE: the FCA policy statement goes to great lengths to differentiate between the forthcoming free ‘guidance’ which it doesn’t rate as being adequate to provide tailored risk warnings to tailored questions.

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