The FCA’s Targeted Support proposals ‘could be detrimental to consumers’, according to The Society of Pension Professionals.

It said it had particular concerns about areas such as decumulation and annuities.

The regulator’s consultation into its new proposals closes today and has been widely welcomed by adviser firms.

The SPP said it was supportive of the concept of Targeted Support but said there are numerous areas where the FCA’s proposals could be improved.

In its response to the regulator’s consultation, the FPP said: “In some areas, the current proposals will restrict the level of support that could be made available to consumers and could therefore be detrimental to consumers. For example, in relation to decumulation and annuities.” 

The Society also took issue with the proposal to exclude pension pot consolidation from targeted support, saying: “It is not clear to the SPP why a recommendation to consolidate into or out of a particular product for the purpose of pension consolidation should be excluded from targeted support.

“In both the accumulation and decumulation phases, consolidation may be an integral piece of any suggestion to achieve a better outcome, the proposals to exclude targeted support in relation to consolidation also appear to be inconsistent with wider policy objectives to promote consolidation and encourage members to seek better value for money.”

The SPP also said that their members prefer the term “better position” rather than “better outcome” because it better describes what targeted support is designed to achieve, is easier to measure and reduces the potential for confusion with terminology already in place under the FCA’s Consumer Duty.

Amanda Cooke, chair, SPP financial services regulation committee, said: “The SPP is keen to ensure these proposals deliver for consumers. That’s why we’ve highlighted areas of concern, likely barriers to success and a range of suggested improvements.

“We look forward to continuing to work with the FCA in a spirit of collaboration to make targeted support the best it can be.”

The SPP has 90 corporate members who collectively employ over 15,000 pension professionals.

They include asset managers and investment companies (like Insight Investments and Aberdeen), actuaries, lawyers (Travers Smith, A&O, Eversheds), consultants (like XPS Group), trustees, and administrators (like Capita and EQ).

The FCA published its proposals on ‘targeted support’ in June. The changes would allow firms to make financial guidance suggestions to groups of consumers with 'common characteristics'.

The FCA said the reforms should set the framework for the next 20-30 years, to support consumers now as well as future generations.