Members are invited to join a Teams session Tuesday 28 November 2023 14:30-15:30 The Department for Work and Pensions is undertaking a series of engagement sessions on the draft “staged timetable for connection” for pensions dashboards. This engagement is expected to...
AMPS responds to Chapter 5 of CP 12/5
AMPS responds to Chapter 5 of CP 12/5
The SIPP industry, represented by the Association of Member-directed Pension Schemes, has rejected the FSA’s revised proposals for disclosure of charges citing a lack of research to demonstrate that consumers would be happy to pay more to receive more detailed illustrations.
The response by AMPS to the FSA Consultation Paper CP12/5 was outlined by AMPS Chairman Andrew Roberts at the AMPS conference in London, attended by representatives of the FSA and Gregg McClymont MP, the shadow minister for the Department of Work and Pensions.
Roberts revealed that AMPS had conducted a round table attended by 15 SIPP providers and representing 30% of the SIPP industry by numbers. He had used the discussions to issue a response to the FSA that highlighted the industry’s united concerns about the proposals.
The response concluded that:
- There was no desire by the industry to hide costs from consumers
- Too much focus on cost could result in consumers discounting other key factors
- Providers felt that consumers do not value complex illustrations
- The implementation and on-going costs cited in CP12/5 were wildly underestimated
- The FSA should commission research before altering the current system
- The industry cannot support an expensive proposal with no added value to the consumer and would be surprised if the FSA thought it prudent to do so
The view of the round table participants was echoed by the delegates at the AMPS conference, 72% of whom thought that the cost estimates were out by a factor of at least 10 and only 6% of whom thought that consumers preference would be for a multi-page Key Features Illustration.
Commenting afterwards, Roberts noted “It is clear that there is political motivation for consumers to understand the cost of their pension, whatever form that pension might take. Government need to be encouraging the population to save though as otherwise people will have to work longer which reduces the number of jobs for the younger generation. Focus should be on understanding the benefit of a pension, not the cost.
In terms of cost, it should be sufficient for consumers to understand broadly what price bracket a personal pension falls into and this can be done in a number of ways without worrying about spurious accuracy. Understanding how fuel efficient your new car will be could be a complicated calculation but usefully there is an accepted scale to aid comparison.
Gregg McClymont promotes disclosure of charges and was clever enough to realise that a practical solution that solves the underlying issue is sufficient to satisfy political ideal. Hopefully the delegates at the AMPS conference will not be the only ones to take note of what he had to say.”
For further information, please contact:
Louise Dolan, FTI Consulting
020 7269 7192
AMPS is the main trade body that looks solely after self-invested pensions, or member-directed pension schemes to give them their proper title, such as Self Invested Personal Pensions (SIPPS) and Small Self Administered Schemes (SSASs).
AMPS has in excess of 200 member firms representing all parts of the industry: SIPP providers, SSAS practitioners, pension lawyers, software developers, banks and investment houses. Amongst are our members are some of the largest pension providers but also some boutique firms.
AMPS is run by a committee elected from representatives of member firms by the membership. Amongst its varied duties the committee makes representations on behalf of the member-directed pensions industry to Government bodies such as HMRC, Treasury, FSA and DWP.
AMPS provide support to members by regular news posts, summary newsletters, open meetings, workshops and an annual conference.