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A stronger nudge to guidance – what does it mean for advisers?


The FCA policy statement PS21/21 – which follows through on a requirement set by parliament regarding guidance take up - has specified that from 1st June 2022, pension providers must give customers a stronger ‘nudge’ towards Pension Wise guidance when they access their pension savings, including where they are transferring funds for the purpose of accessing them. This ‘nudge’ includes explaining the nature and purpose of the guidance, encouraging take up of the free and impartial guidance to customers that Pension Wise offers and offering to make a guidance appointment on behalf of the customer.

There has now been further confirmation, subsequent to the issue of the policy statement,  that where an adviser facilitates a transaction on behalf of a client to a pension provider (for example via the submission of an online request for the client to access their funds) then it is clear the client has received advice on this transaction and it won’t be necessary for the provider to explain the Pension Wise service to them and offer to make them an appointment. However, if a client approaches the provider direct with the intention of making a withdrawal, then the provider is obliged to discuss the guidance service with the client.

In these circumstances, we’ll ask the client if they’ve already received either advice or guidance concerning this transaction. If they confirm they have, then we’ll ask them if they’ve had a change in circumstances since they received this advice or guidance. Assuming they confirm they haven’t, or they don’t want to proceed to guidance, then we would facilitate the request for withdrawal where allowed (some heritage products only allow certain types of withdrawal where advice has been given), supplying our normal risk warnings as part of the journey.

It’s important to note that in situations where an adviser has asked their client to contact us directly, that they understand we’re required to discuss  advice and guidance with the client, as outlined above. Similar processes are in place for customers either transferring funds in or out when they are looking to access benefits, where an adviser isn’t facilitating the transaction.

The FCA policy statement can be accessed here.