The new IFA governance update service provides pension schemes with an annual process for assessing the ongoing suitability of their chosen IFAs. Trustees receive a governance report outlining the key details that were taken into consideration at the time of an IFA appointment, in addition to information that is newly available and now relevant. This enables trustees to review the appropriateness of the ongoing appointment. The service also enables trustees and sponsors to review the competitiveness of existing fee arrangements as well as member engagement and feedback.
Kelly Hurren, head of Member Options at Aon said: “For some time, trustees and sponsors of pension schemes have recognised the need to support members approaching retirement with access to high-quality financial advice - often by providing access to an IFA firm, or a panel of firms. However, while new IFA appointments involve a great deal of consideration and scrutiny from key parties, regular reviews of the ongoing suitability of these partnerships are vital, much in the same way as trustees monitor ongoing relationships with other third parties.
“Given pension freedoms were introduced in 2015, some IFA appointments have now been in place for a considerable time and no trustee would have made such an appointment on a ’hire and forget’ basis. Having an annual review framework to help monitor key areas for an IFA is a good governance practice which also ensures that both the trustees and sponsor are comfortable with their ongoing appointment.
Kelly Hurren continued: “With that in mind, Aon’s annual IFA governance report sets out an update of the key details that would have been taken into account at the time of an IFA appointment. This includes the IFA’s degree of interaction with the FCA and other regulators, any changes to insurance protecting member claims, member complaints or Ombudsman cases and member charges. The report can also benchmark fees –helping trustees and sponsors to review key decision areas and to assess whether this remains the most suitable support for their members.”
Key benefits of the Aon IFA governance update service
• Supports trustees and sponsors in reviewing the continued suitability of the IFA support they are providing to members in a cost-effective way
• Can form part of a wider review of the ongoing effectiveness of retirement arrangements
• Conducted by an independent third party.
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