This Policy Statement reports on the main issues arising from Consultation Paper 11/3 (Product Disclosure: Retail investments – changes to reflect RDR Adviser Charging and to improve pension scheme disclosure), and publishes final rules.
Consultation Paper (CP) 11/3 (Product Disclosure: Retail investments – changes to reflect RDR Adviser Charging and to improve pension scheme disclosure) covered:
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changes to the key features illustrations (KFIs) that firms must give clients arising from the Retail Distribution Review (RDR) rules on Adviser and Consultancy Charging;
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disclosures relating to personal pension schemes, including self-invested personal pension schemes (SIPPs); and
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the potential replacement of monetary projections by inflation-adjusted projections for personal and stakeholder pensions (both individual and group).
This Policy Statement (PS) deals only with the first and third issues. In the light of the responses to the first issue, and also following discussion with trade bodies and individual firms, the FSA has made some changes to the rules it consulted on, which are described in Chapter 2.
The responses to the FSA's proposals in relation to the second issue, to change the disclosure requirements applying to personal pension schemes (including SIPPs), showed a wide divergence of views, and raised further issues and concerns. The FSA has reflected on these responses and – in order best to achieve the aim of a fairer, more transparent and competitive personal pension scheme market – has decided to re-consult on revised disclosure requirements. So, the disclosure rules for personal pension schemes will not alter with effect from April 2012 as originally proposed, but they are likely to be amended later.
In CP11/3, the FSA consulted upon changes to Key Features Illustrations (KFIs) to reflect the impact of adviser and consultancy charges following the implementation of the RDR from the end of 2012. The current rules apply to packaged products, and the FSA said that it did not intend to extend them to all products covered by the new definition of ‘retail investment product’. Products that come within the wider definition but are not packaged products (for example unregulated collective investment schemes and structured investment products), will continue to be subject only to the ‘fair, clear and not misleading’ requirement in the Conduct of Business sourcebook (COBS 4.2). The FSA also said that the changes it was proposing to the rules on the content of KFIs were limited to personal pensions, as these are not expected to come within the scope of the European Commission’s Packaged Retail Investment Products (PRIPs) initiative. The FSA has not changed its approach in these respects.
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