Welcome to our monthly newsletter, Regulation Round Up. Each month, we’ll bring you key insights and timely updates on financial services regulations to help you stay informed and ahead of industry changes. Each month, we will cover key stories from HMRC and the FCA, along with other updates related to financial services rules and regulations.
FCA Advice Guidance Boundary Review
The FCA has released an update on its Advice Guidance Boundary Review, highlighting upcoming consultations that aim to make financial advice more accessible and affordable for consumers. For context, in late 2023, the FCA published policy paper DP23/5, “Advice Guidance Boundary Review – Proposals for Closing the Advice Gap”. This paper included three proposals to address the advice gap:
- Targeted support
- Simplified advice
- Further clarification of the advice boundary
The review aims to ensure people have access to timely and affordable assistance when making important financial decisions to maximize their resources.
As of December 2024, the FCA has moved on to its first consultation, focusing on pensions. This consultation will explore how targeted support might work, including research into consumer interest. By mid-2025, the FCA plans to develop targeted support proposals and consult on draft rules that will apply to consumer investment and pensions.
Read more here:
FCA Seeks Further Views on Enforcement Transparency Proposals
The FCA has published the second phase of its consultation on increasing transparency in enforcement investigations and has outlined plans for further engagement following concerns raised in the original consultation.
New data from the regulator shows an accelerating pace of investigations, with some completing within 16 months. By providing data, case studies, and details on the public interest test, the FCA aims to clarify how decisions on announcing investigations might be made if the proposed changes proceed.
Read more here:
Government’s Pension Review Suspended
Reports indicate that the government’s retirement adequacy review has been postponed due to concerns about its impact on employers, particularly around potential increases in administrative burdens and contribution costs tied to proposed changes in auto-enrolment. especially after the recent budget. Key areas expected to be addressed in the review included:
- Lowering the minimum auto-enrolment age from 22 to 18
- Removing the £6,240 annual salary threshold so pension contributions apply from the first pound earned
- Increasing minimum contributions from 8% to 12% of earnings
Read more here:
Pension Schemes Newsletter 165
HMRC has published Pension Schemes Newsletter 165, an important update for pension administrators and financial professionals. It provides guidance on recent changes to lump sum payment rules and offers clarity on regulatory requirements following the LTA abolition. Key highlights include:
- Some members are asking how they can return pension commencement lump sums (PCLS) or uncrystallised funds pension lump sums (UFPLS) taken due to speculation about potential pension changes in the 2024 Autumn Budget. The newsletter confirms that tax-free lump sum payments cannot be undone, and lump sum allowances will not be restored.
- Regulation 17(5)(2) clarifies that when a TTFAC is issued or cancelled, members must send a copy of the certificate to other schemes they belong to within 90 days or before any relevant benefit crystallisation event (RBCE). The 90-day period began on November 18, 2024, when the regulations came into force.
Read more here:
As a financial adviser, keeping up with regulatory changes is key to delivering the best advice to your clients. At We Complement, we’re here to help you navigate these shifts with confidence.
Get in touch today to see how we can support your practice and help you adapt to the latest developments in the industry.