The FCA recently announced the results of its review of Retirement Income Advice. My immediate reaction was to be flattered – it was great to see the FCA stating that the Sussex Retirement Planning way of doing things was what everybody else should be doing (well, they didn’t quite say that, but the FCA did give a list of things which firms should be implementing when giving advice about retirement income – and we are already doing all of them and more!).
The FCA’s review did not touch upon ways in which couples can organise their finances.
However, whilst it may be that our approach to retirement income planning now has the FCA seal of approval, that does not exempt us from having to write more things down. It hasn’t escaped our attention that getting other people to write things down is a favourite instruction of most regulators.
I’m pleased to say that the obligation to write things down doesn’t extend to our clients; we’re allowed to do that for you! However, there may be a few extra things which we need to obtain from you to satisfy the regulator. So, for example, we may need to have written confirmation of what will happen to your annuity or company pension on your death. We generally have this information, but, sometimes, we don’t have documentary evidence of it, so we may need to ask for your help (usually we will be able to get this information from the pension company).
The FCA is also asking us to collect more information about our clients’ expenditure, so it is possible that we may need your help with more detailed information here. The FCA is particularly keen that we can evidence that you have sufficient income to cover your basic cost of living, and this figure varies from person to person – some people spend more on some items than other people (some shop at Waitrose, some shop at Aldi!), and some people think that some things are essential whilst others consider them a luxury (some people don’t consider carbon frame bikes to be an essential, apparently). We already have this information for many of our clients, so it may be that no action is necessary.
Over the next year or so, we may ask for your help filling in a few gaps in our documentation, but we are happy that we are already complying with the FCA’s recommendations when it comes to advising our client’s seeking retirement income.
Philip Wise | philip@sussexretirement.co.uk
Managing Director and Chartered Financial Planner
