Other key sections

There are some other sections that I will touch on briefly. 

What due diligence does the company carry out regarding third-party tools and service providers, linking into any automated advice services?

Does the company undertake stochastic or deterministic cash flow modelling? What assumptions are used and how often are they reviewed?

How often is a customer’s cash flow modelling reviewed? What is the company’s approach to fact finding on decumulation needs?

Are approaches to risk profiling and assessing capacity for loss in decumulation developed in-house or provided by a third party? Do they differ from tools used in accumulation and how often are they reviewed?

Companies are asked what minimum adviser qualifications they require, and the percentage of advisers with different qualifications and arrangements for continuous professional development.

Also, what is the average value of advisers’ bonuses, what percentage is this of total remuneration, and does clawback operate?

Perhaps more interesting is a question on bonus award criteria, which may be seeking to check alignment with a consumer duty culture.

Conclusion

For many companies, retirement income advice is a significant part of their business. The survey is comprehensive and leaves few, if any, stones unturned, with many questions showing strong links to the consumer duty.

The FCA has not given a firm timeline for the next steps, but we may see the findings around the year-end.

Let us hope the the regulator uncovers many strengths in this market. But I would be surprised if, like in all such reviews, there were not a few recommendations for where some companies could improve.

Steven Cameron is pensions director at Aegon