FCA and TPR presented on their work on a value for money framework
FCA presented on its work to review the classification of LTAFs as non-mainstream pooled investments and the possibility of appropriately managed distribution of LTAFs to retail clients and is planning to consult on this later in 2022. This will be done in a broader context of the recent HMT and FCA consultations on changes to the financial promotions regime and the classification of high-risk investments. The FCA is also taking forward the PFWG recommendation on permitted links.
FCA and TPR presented on their work on a value for money framework for all defined contribution FCA and TPR-regulated pension schemes, with an aim to support a shift in focus from cost to value. Once published, this framework could help reach the required common understanding of value by developing metrics and enabling comparisons of value between pension schemes. A joint feedback statement on the recent FCA / TPR discussion paper is expected later this year, to be followed by FCA / DWP consultations on a proposed framework. This is a complex, cross-industry piece of work which may require a phased approach.
DWP summarised their proposals, recently consulted on, to remove well-designed performance-based fees from the regulatory charge cap and provide appropriate accompanying mechanisms to ensure member interests remain protected. DWP has also continued its work on DC scheme consolidation and came to a view that the ongoing FCA / TPR work on value for money could be a more effective way forward to support consolidation. Government will soon be publishing a response to the recent charge cap consultation and the earlier call for evidence on DC scheme consolidation. More broadly, DWP will continue its support for enabling increased investment in less liquid assets and for removing the barriers to it.
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