Government set to relax pension regulations
04 March 2004
Rules governing pensions advice, which are intended to protect employees from mis-selling, may be diluted under a new government proposal.
Despite accepting that such a move might raise the prospect of pensions mis-selling, the Treasury believes it is a risk worth taking, according to reports in the Daily Telegraph.
The proposal to loosen consumer protections and allow unqualified managers to offer staff advice about retirement savings was contained in the two-year review of the Financial Services & Markets Act (FSMA) published last week.
It also calls for Citizens' Advice Bureau advisors to be given a wider remit and be allowed to give more in depth financial advice.
"Where uncertainty about the effect of legislation causes advisers to be too cautious…this could compromise the debt advice services offered to clients who often require urgent specific advice," the review argued.
"In these circumstances, some advice (even if slightly flawed) may be better than no advice at all."
While acknowledging that some pensions rules are "unnecessarily tight," Mick McAteer from the Consumers' Association expressed concern at any moves that would "dilute the level of consumer protection".