Companies are also asked if they identify groups of customers for whom their decumulation advice model is not suitable.
Options might be because the fund size is below their minimum — if arising from a defined benefit transfer — the client’s desire for non-standard investments, or because the client is an inexperienced or particularly cautious investor. This may give insight into FCA post-consumer duty expectations regarding positive and/or negative target markets.
Data is asked around minimum, mean and maximum customer fund values, initial and ongoing advice fees, as well as overall income from decumulation advice, expressed in sterling as well as a percentage of total revenue.
Has this changed from the previous year, and how much comes from new customers?
Data is split between transactional and holistic advice. The FCA is also interested in the numbers and percentage of customers receiving advice in decumulation where aspects are automated.
Suggestions offered include risk profiling, assessing capacity for loss, fund recommendations, income withdrawal strategy and sustainability and/or choosing between annuity versus drawdown. Clearly, this is a topical area.
Companies are also asked for the number of clients who paid for an ongoing service, what is covered in an ongoing review service and the frequency.
The FCA will be interested in assessing if these ongoing review services, which may form part of a centralised retirement proposition, are ticking all the consumer duty boxes.
Vulnerable customers
One key consumer duty aspect covered is companies’ vulnerable customer policies and processes.
Do companies identify vulnerabilities both at point of initial decumulation advice and on an ongoing basis? How many decumulation customers have been identified as vulnerable and what proportion of total decumulation customers does this represent?
There is also a multiple-choice question on what adjustments are made — are companies offering support face to face, by telephone or through home visits, amending documentation or advising in the presence of a friend or family member?
Again, this may be worth considering as part of broader consumer duty compliance.
Adviser-charging models
Here, the FCA explores charging models for decumulation advice — fixed and flat fees, percentage charges, caps and collars — including if these differ from the accumulation phase.
Figures are requested on total decumulation advice revenue split between initial and ongoing and also between that paid direct by clients and facilitated by providers.
Independent versus restricted advice data is asked for separately, so expect the regulator to feed back on comparisons here.
Platform selection
The survey asks if a company offers its own platform, suggesting this will be scrutinised separately. Also, how many platforms does the firm make available to advisers?
