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8th May 2014
From FT Adviser 7th May
The City regulator must reconsider a rule change brought in on 6 April that could see advisers’ clients being told that saving into a pension could leave them worse off, Nigel Chambers has said.
The chief executive of CTC Software warned that changes to the rules affecting how advisers calculate potential growth rates in pension illustrations ran the risk of confusing clients and potentially putting them off saving into a pension.
He said: “It’s no surprise that people will be confused when they see the lower illustrated value of their pension for the first time. This is a complicated subject.
“We urge regulators to make a true level playing field for illustrations before investors are turned off investing in pension funds due to confusion and a lack of trust.”
Changes confirmed in the FCA’s policy statement 13/02 mean advisers are now required to illustrate potential future performance on a real-terms basis with a 3 per cent growth rate differential.