FCA-regulated firms have to connect to the dashboard between April-August 2023, to supply information about their members on request from a dashboard user.
Dashboards expected to be available to the public from the latter half of 2024 (the Dashboard Available Point)
Passing data to financial advisers could be a crucial feature of pension dashboards
Multiple regulator involvement comes with risks which need to be addressed
Rachel Vahey, AJ Bell Head of Policy Development, comments: “There is little doubt that the launch of pensions dashboards will shake up the pensions market. Most savers will have a complete picture of their pension savings within their grasp. This will show what their pension pots are worth, which pension company they are with, and what income it could give at retirement.
“Armed with this new information, they will then need the right support to understand how to use the information to make better pension decisions. So it is essential the FCA set the right regulatory framework around the presentation of this new material and the help and prompts people will receive.
“This is a dive into the unknown, so we urge the FCA to closely monitor this market as it develops, to understand who is using the dashboards and what action they take.”
Passing data to advisers and providers
“A pension saver will be able to extract the data they are shown and pass it back to themselves, and, if they want, to a pension dashboard services (PDS) firm so it can model different pension outcomes.
“If a pension saver gives their financial adviser permission to access the dashboards on their behalf, then we recommend the financial adviser should also then be allowed to pass the data back to themselves. This information will be invaluable in working with their clients to set a retirement strategy, as it will allow advisers to then incorporate the data seamlessly into reports and recommendations to clients.
“Ultimately, dashboards could be a driver of consolidation activity and encourage people to seek the help of a financial adviser in building a stable retirement plan. Demand for advice is likely to be high where people have multiple pension schemes with different rules and benefits that need explaining and understanding before a decision can be made about whether they should be left where they are or consolidated into a single scheme.
“People with simpler needs or who can’t afford advice will also need help and the FCA needs to consider whether the development of personalised guidance services have a role to play in helping these people make the best decisions.
“Whichever route is chosen, the FCA must set out clearly how dashboard users can pass their information to legitimate parties. But, equally importantly, if anyone else is asking them for dashboard pension information then this is a red flag and they need to be alert to potential scams.”
Crowded regulatory approach
“There is not one, nor two, but three bodies involved in setting the regulatory framework. The FCA is regulating PDS firms, disclosure, signposts and warnings for dashboard users.
“The Pensions Dashboard Programme (PDP) is controlling what information can be shown to dashboard users and how it must be presented.
“Finally, The Pensions Regulator (TPR) also has a role in regulating occupational schemes, who could choose to become a PDS firm.
“All three regulators have their areas of expertise, but such a crowded approach risks diluting the focus on what should be the most important factor – the journey for the consumer. There is risk that too many cooks contrive to serve-up overlapping or contradictory messages, or critical gaps.
“We need to have a single view of the customer journey to make sense of it, and understand where protections are needed.”
Understanding the dashboard roadmap
“The launch of the pensions dashboards, is just the first phase of a bigger government project to roll out information to pension scheme members and it’s no secret government have aspirations for further developments.
“But to allow the industry to respond fully to these important consultations on dashboard design, we need sight of the government plans. Showing the industry a detailed future roadmap for dashboards will help providers understand where the government wants to take this project, and what needs to be put in place now, at the beginning, to protect pension savers.”
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