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Old Mutual Wealth: trust based schemes should pay towards the Guidance Guarantee

In its response to the FCA Consultation Paper (CP14/11) ‘Retirement Reforms and the Guidance Guarantee’, Old Mutual Wealth is calling for part of the cost of the service to be borne by an addition to the pensions levy, paid by workplace trust schemes. This should reduce the amount contributed by financial advisers.

The current proposal for the Guidance Guarantee levy is to raise it from the firms that will potentially benefit from the retirement guidance service. Old Mutual Wealth agrees with this principle but says due to auto-enrolment, the vast majority of defined contribution provision will be through workplace trust schemes. Old Mutual Wealth therefore feels part of the cost of the service should be paid by workplace trust schemes some of who will also provide retirement income facilities.

Where a provider regulated by the FCA also administers occupational schemes, they should be able to opt out of the additional pensions levy amount so that they don’t contribute twice for the service.

Tom Hawkins, Head of UK Proposition Marketing at Old Mutual Wealth, comments:

Tom Hawkins, Head of UK Proposition Marketing“We agree that the funding of the service should be borne by those who stand to benefit from the service. However, we do not feel the proposals cast the net widely enough. trust based schemes, regulated by the Pensions Regulator, will also benefit and should pay towards the service via the pensions levy.

“Including trust based schemes will mean a more proportionate method of funding the Guidance Guarantee and potentially reduce the amount borne by financial advisers, which is currently disproportionate.”


Notes to Editors:

Old Mutual Wealth

Old Mutual Wealth is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

It has an adviser and customer offering spanning:

  • Financial advice delivered by the Intrinsic network in the UK and AAM Advisory in Singapore
  • Platform based wealth management and protection products delivered by Old Mutual Wealth in the UK & Italy* and Old Mutual International globally
  • Asset management solutions delivered by Old Mutual Global Investors
  • Discretionary investment management delivered by Quilter Cheviot.

Old Mutual Wealth oversees £119 billion in customer investments (as at 30 September 2016).

Old Mutual Wealth is part of Old Mutual plc a FTSE 100 group that provides life assurance, asset management, banking and general insurance. Old Mutual is trusted by more than 19.4 million customers across the world and has a total of £342.7 billion assets under management (as at 30 June 2016).

*Old Mutual Wealth announced the sale of Old Mutual Wealth Italy to Ergo Italia on 9 August 2016. The transaction is pending completion.

This press release is for journalists only and should not be relied upon by financial advisers or customers. Investments may fall or rise in value and investors may not get back what they put in.