This article by Carmen Reichman of IFAonline.co.uk on the 17th of July, 2013 discuss the proposal to make pension investments restricted to protect pension savers from investing in suspicious products that could bleach their earnings.
The pensions trustee and administrator has said that the regulator
needs to find a way to protect pension savers from investing in
questionable products which could wipe out their savings.
The firm has suggested a list of investment products that savers can invest in should be drawn up - a "permitted investments list" - which should be authorised by The Pensions Regulator.
London & Colonial product development manager Adam Wrench (pictured) said: "Instead of saying what you can't invest in, the emphasis needs to change to what you can invest in.
We propose to draw up a list of investment products that are suitable for pension savers and apply the list to all different types of pension schemes.
"We need to protect pension savers' money so that ultimately the money is used for what it is intended - to provide an income for life - rather than being gambled and spent."
Particular areas of concern were savers investing in undeveloped property schemes abroad that could then collapse, similar to what happened with Harlequin, Wrench said.
However, he said his list of approved investments will include property that is already developed and most likely located in the UK.
Wrench said he understood that the regulator did not want to regulate pension schemes, such as small self-administered schemes and qualifying registered overseas pensions, and it wanted to give consumers the right to pick what to invest in.
But consumers needed to be protected from dodgy schemes that are becoming more and more aggressive, targeting people directly and convincing them to invest in products that are unsuitable and risky, he said.
"People are making a business out of these esoteric investments and are cold-calling people. The practice is a lot more mass market than it used to be."
Wrench added regulatory pressure on self-invested personal pensions often forces people to switch to their unregulated counterparts, that's why a permitted investments list should be rolled out across all schemes.
London & Colonial is currently in the process of drawing up its proposal, which it plans to submit to the regulator after the summer.
The firm hopes to achieve an industry-wide consultation on the issue in which views from the HM Revenue & Customs, the Financial Conduct Authority and industry players are heard.
Author: Carmen Reichman
The assets pension savers are allowed to invest in should be
restricted and authorised, to avoid any further scandals like Harlequin,
London & Colonial has warned.
The firm has suggested a list of investment products that savers can invest in should be drawn up - a "permitted investments list" - which should be authorised by The Pensions Regulator.
London & Colonial product development manager Adam Wrench (pictured) said: "Instead of saying what you can't invest in, the emphasis needs to change to what you can invest in.
We propose to draw up a list of investment products that are suitable for pension savers and apply the list to all different types of pension schemes.
"We need to protect pension savers' money so that ultimately the money is used for what it is intended - to provide an income for life - rather than being gambled and spent."
Particular areas of concern were savers investing in undeveloped property schemes abroad that could then collapse, similar to what happened with Harlequin, Wrench said.
However, he said his list of approved investments will include property that is already developed and most likely located in the UK.
Wrench said he understood that the regulator did not want to regulate pension schemes, such as small self-administered schemes and qualifying registered overseas pensions, and it wanted to give consumers the right to pick what to invest in.
But consumers needed to be protected from dodgy schemes that are becoming more and more aggressive, targeting people directly and convincing them to invest in products that are unsuitable and risky, he said.
"People are making a business out of these esoteric investments and are cold-calling people. The practice is a lot more mass market than it used to be."
Wrench added regulatory pressure on self-invested personal pensions often forces people to switch to their unregulated counterparts, that's why a permitted investments list should be rolled out across all schemes.
London & Colonial is currently in the process of drawing up its proposal, which it plans to submit to the regulator after the summer.
The firm hopes to achieve an industry-wide consultation on the issue in which views from the HM Revenue & Customs, the Financial Conduct Authority and industry players are heard.
Author: Carmen Reichman
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