The Financial Conduct Authority (FCA) has paused the implementation of its investment pathways work, however it will press on with its work on defined benefit (DB) transfers amid the coronavirus.
A ‘Dear CEO’ letter to addressed to those providing services to retail investors and published on Tuesday evening (31 March) outlined steps the regulator was taking to continue its work amid the coronavirus pandemic.
Amid a range of measures outlined in the letter the FCA confirmed it would pause the implementation of investment pathways, which were meant to come into force from August 2020.
Elsewhere, the regulator confirmed its ongoing work with firms providing DB transfer advice would continue. However, it has paused its follow-up work on assessing the suitability of advice. It said it has already notified those involved.
Last July the financial watchdog said consumers entering drawdown, or transferring assets already in drawdown to a new provider, without taking advice must be presented with four options for how they might want to use their pot, namely:
- Option 1: I have no plans to touch my money in the next 5 years
- Option 2: I plan to use my money to set up a guaranteed income (annuity) within the next 5 years
- Option 3: I plan to start taking my money as a long-term income within the next 5 years
- Option 4: I plan to take out all my money within the next 5 years
However, due to Covid-19, the regulator has paused the requirement after firms and trade associations asked for clarity on the implementation deadline. Additionally the FCA has paused its work on platform switching provisions. The FCA added it would update its website with more information on the changes as soon as it could.
This article was previously published on Professionaladviser.com