From early November we will be sending new style ‘wake-up packs’ to clients following the Financial Conduct Authority’s (FCA) Retirement Outcomes Review which resulted in new requirements for all providers.
Although these new requirements are aimed at non-advised clients to improve engagement and to help them make better informed retirement decisions following the introduction of Pensions Freedoms in 2015, the new wake-up packs must be sent to all clients. This includes those that are advised which offers you and your clients the opportunity to include the wake-up packs in to your planning discussions.
So what is changing?
Wake-up letters are currently sent between 4 – 6 months before a client’s intended retirement date, or earlier if they request a retirement form or illustration. The new rules require that these are also sent at certain trigger points:
• Within the 2 months after a client reaches age 50 and;
• 4 – 10 weeks before the client reaches age 55; and
• Every 5 years after that, until the client’s pension fund is fully crystallised
The content of the open market option statement is also changing and will include:
• A single page summary document (to include company name, client name, intended retirement date, levels of contribution and who pays them, current fund size, any early exit penalties, any guarantees, a statement asking the client to consider whether they are saving enough to meet their needs at retirement and a clear signpost to the government’s Pension Wise service and how to access it).
• Money Advice Service factsheet
• Appropriate retirement risk warnings (a single page to identify the main risk factors relevant to clients’ exercise of open market options and to prepare the appropriate retirement risk warnings in relation to each of those risk factors.)
• A statement about whether any guarantees apply and if so, how they work, and;
• Any other information to enable the client to be able to make an informed decision.
Please click here to view a sample copy of the new Curtis Banks wake-up pack.
The new requirements highlight the importance of financial advice. We intend that the additional information that Curtis Banks will be sending is an opportunity for you and your clients to review and build in to long term planning to help achieve their retirement goals.
If you would like any further information please get in touch with your local Curtis Banks Business Development Manager.