Do customers have to make an appointment with Pension Wise?
Customers can opt out of making an appointment with Pension Wise. But if they do not want an appointment, they have to confirm that to the provider. They can do this at any time.
It is important that the provider captures what sort of opt out it is. The FCA has identified three types:
- Customer confirms they have already received regulated advice and opt out of making a guidance appointment; or
- Customer opts out of making a guidance appointment and confirms they do not want to take regulated advice; or
- Customer opts out of making a new guidance appointment, as they have previously received pension guidance, and confirms they do not want to take regulated advice.
Once the customer has opted out, the provider can go on to ask for information to assess which retirement risk warnings apply.
What happens if customers do make an appointment with Pension Wise?
If the customer decides to go ahead with a guidance appointment (in other words does not opt out) then the provider cannot go ahead with the benefits decision until the customer comes back and confirms that they have had the guidance.
If the provider booked the appointment, they have to check if the customer attended the appointment and received the guidance. If the customer booked the appointment themselves then before the provider settles the benefits, the provider must ask if the customer received the guidance.
If the customer failed to attend or failed to book an appointment, providers have to go back to the start of the process and again nudge the customer to make an appointment. But again the customer has the option to opt out at this point.
What is ‘re-nudging’?
If a customer confirms they have previously taken guidance, if the provider is aware that the customer’s circumstances may have changed significantly since doing that, and that the customer may benefit from repeat guidance, then providers have to return to the start of the process and nudge the customer again towards making another guidance appointment.
A significant change in circumstances would include things such as divorce, bankruptcy, or bereavement. Or it could mean a significant change in the value of the defined contribution fund.
What do the new rules mean for advised clients?
The FCA’s stronger nudge rules apply where a customer directly contacts the provider to enquire about taking benefits. If an adviser contacts a provider on behalf of a client with a client instruction, then the rules do not apply. This makes sense as the retirement risk warnings would also not apply in this situation.
However, the rules do apply where an advised client gets in touch directly with the provider. In this case, the provider has to deliver the nudge to the customer regardless of whether they have received advice, even if they are actively being advised in relation to their current transaction.
What about beneficiaries on death benefits?
