Reacting to the FCA’s Retirement Outcomes Review consultation, Mark Jaffray, partner and head of DC consulting at Hymans Robertson comments:

“The FCA’s long-awaited proposals following the Retirement Outcomes Review are essential for people which are overwhelmingly unsupported and underserved with the life-changing decisions they are now expected to make at retirement.

“The industry needs to start viewing drawdown as a service rather than a product. People are crying out for more affordable access to advice or guidance around their pension options and personalised investment solutions based around their individual goals will help to provide that. The FCA’s proposal to introduce default ‘investment pathways’ will be an important step in the right direction as long as costs are kept low and clearly communicated throughout.

“Greater transparency around charging will be a welcome benefit for many. Explaining a clear first year charge in pounds and pence will allow consumers to compare offers more easily across a number of providers and encourage them to actively shop around as a result. However, it’s important that the FCA doesn’t stop there. We are already seeing parallels in drawdown with the sale of annuities products prior to 2017, where despite an open market option consumers rarely looked around for the best deal. The FCA addressed this problem by forcing providers to share details of the best available quote in the market for an annuity, actively promoting the value from shopping around. Given that the vast majority of people now opt for drawdown over an annuity product it’s madness that we don’t have the same measures in place.”