1. Is legislation tipping the scales of regulation and weighing on advice?
This information is for intermediaries only. It mustn’t be distributed to, or relied on by, customers.

2. Learning objectives
Is legislation tipping the scales of regulation and weighing on advice?
Examine the current key regulatory and legislative themes.
Identify the continued political, regulatory and financial planning challenges facing investors.
Recognise the potential advice opportunities that exist for intermediaries.

3. Are the scales tipping? Regulation Legislation Advice
Is legislation tipping the scales of regulation and weighing on advice?
Change, challenges and opportunities
Regulation
Legislation
Advice

4. Regulatory/legislative challenges
Is legislation tipping the scales of regulation and weighing on advice?
FCA Investment Platform Market Study
FCA Retirement Outcomes Review
FCA Non- Workplace Pensions Review
FSCS review
Social care funding
Brexit
Financial advice market review (FAMR)
FCA Asset Management Market Study
Defined benefit to defined contribution transfers
Pension scams
Pension
dashboards
MiFID II
Pensions tax relief
Defined Benefit White Paper
Auto enrolment – where next

5. The biggest opportunities
Is legislation tipping the scales of regulation and weighing on advice?
Change, challenges and opportunities
Source: Aegon adviser research, September Research conducted by Research in Finance amongst 100 UK financial advisers. Fieldwork conducted 30 August – 6 September 2018.

6. The biggest threats
Is legislation tipping the scales of regulation and weighing on advice?
Source: Aegon adviser research, September Research conducted by Research in Finance amongst 100 UK financial advisers. Fieldwork conducted 30 August – 6 September 2018.

7. Key themes FCA Investment Platform Market Study
Is legislation tipping the scales of regulation and weighing on advice?
FCA Investment Platform Market Study
FCA Retirement Outcomes Review
Pensions dashboard
Social care funding
Pension cold calling ban
Pensions tax relief

8. Platform regulation Main areas of focus:
Is legislation tipping the scales of regulation and weighing on advice?
FCA Investment Platforms Market Study
Main areas of focus:
Barriers to entry and expansion.
Commercial relationships.
Business models and platform profitability.
The impact of advisers.
Customers preferences and behaviours.
“The investment platforms market study will allow us to understand the causes of any competition problems in this market and assess what we can do to improve competition between platforms and improve consumer outcomes.”
Source: Money Marketing, FCA to launch platform competition review, April 2017

9. MS17/1.2 - overview Final report: Q1 2019
Is legislation tipping the scales of regulation and weighing on advice?
The FCA found that the market is typically working well.
It is not proposing radical changes.
Some areas where competition is working less well have been identified.
Proposed remedies are intended to facilitate shopping around.
Final report: Q1 2019

10. MS17/1.2 – key findings Switching between platforms can be difficult.
Is legislation tipping the scales of regulation and weighing on advice?
Switching between platforms can
be difficult.
Shopping around for a lower cost platform is not easy.
The risks and expected returns of model portfolios are unclear.
Consumers may be missing out by holding too much in cash balances.
Previously advised ‘Orphan’ clients face higher charges, lower service and challenges to switch platforms.

11. MS17/1.2 – proposed remedies
Is legislation tipping the scales of regulation and weighing on advice?
Make it easier for investors to compare and switch platforms.
Help consumers to shop around through better price transparency.
Help consumers who find it hard to compare the risk levels of model portfolios.
Help consumers building up large cash balances without knowing interest, charges and potential lost investment returns.
Make adviser platforms work better for orphan clients who no longer have an adviser.

12. MS16/1.3 - overview Protect consumers from poor outcomes.
Is legislation tipping the scales of regulation and weighing on advice?
FCA Retirement Outcomes Review – Final report
Protect consumers from poor outcomes.
Improve consumer engagement with retirement income decisions.
Promote competition by making the costs of drawdown clearer and comparisons easier.

13. of non-advised drawdown consumers are wholly holding cash.1
MS16/1.3 – key findings
Is legislation tipping the scales of regulation and weighing on advice?
Main concern and continued focus
is on non-advised customers.
FCA acknowledge advice not
affordable/appropriate for everyone.
Want to encourage shopping around and better use of guidance services.
Improved wake-up packs from age 50 (one pager) then every five years.
Providers to check eligibility for enhanced annuity.
33%
of non-advised drawdown consumers are wholly holding cash.1
1Source: FT Adviser, FCA finds third of non-advised drawdown pots stuck in cash, June 2018

14. Investment pathways
Is legislation tipping the scales of regulation and weighing on advice?
Investment pathways for non-advised customers who don’t want to choose.
Choice of three high-level retirement objectives:
I want my money to provide an income in retirement.
I want to take my money over a short period of time.
I want to keep my money invested for a long period of time and may want to dip into it occasionally.
No defaulting into cash.
Independent oversight of value of investment pathways – Independent Governance Committees?
Potential to introduce charge caps the year after investment pathways launched.

15. Single Financial Guidance Body
Is legislation tipping the scales of regulation and weighing on advice?
Single Financial Guidance Body

16. Brexit - creating collateral damage
Is legislation tipping the scales of regulation and weighing on advice?
Pensions tax relief – upside?
Social care funding
Pensions dashboard
Pension cold calling ban
Pensions tax relief – upside?

17. Life after Brexit
Is legislation tipping the scales of regulation and weighing on advice?
What would advisers like to see the government advance with greater priority?
Source: Aegon adviser research, September Research conducted by Research in Finance amongst 100 UK financial advisers. Fieldwork conducted 30 August – 6 September 2018.

18. Increased taxes? Income or wealth?
Social care funding
Is legislation tipping the scales of regulation and weighing on advice?
State/individual
contribution:
Consultation
delayed
State
contribution:
Increased taxes? Income or wealth?
Individual
contribution:
Cap
essential
Potential future funding options:
Insurance
Care ISA
Equity release
Pension
DC pension freedoms allow notional ring-fencing of capped amount

19. Pensions dashboard Background: Challenges:
Is legislation tipping the scales of regulation and weighing on advice?
Background:
Challenges:
Recommended by FAMR in 2016 – see all pensions in one place.
Industry-led group launched a prototype in March 2017.
Launch date – 2019?
DWP took on leadership, and promised to publish a feasibility study – severely delayed.
Government needs to provide information on state pensions.
Without compulsion - forcing all pension providers/ schemes to release data to dashboards – only way it will be successful.
Industry-led development of framework; delivery schedule; and front-end dashboard to end customer.

20. Pension cold calling ban
Is legislation tipping the scales of regulation and weighing on advice?
1 in 10
£91,000
people targeted by
scammers post pension freedoms1
Average loss of victims of pension scams2
The government aims to introduce a ban on cold-callers,
including s and texts.
Originally expected before end of June 2018 –
subsequently delayed.
Have since launched a short consultation on the draft legislation – closed 17 August.
HM Treasury planning on presenting this to Parliament this autumn.
Source: 1. Prudential, One in 10 ‘Targeted by Pension Freedom Scammers’, May 2018
Source: 2. FCA, Regulators warn public of pension scammer tactics as victims report losing an average of £91,00 in 2017, August 2018.

21. What next for pension tax relief?
Is legislation tipping the scales of regulation and weighing on advice?
Are changes on the way?
Pension tax relief:
“One of the last remaining pots of gold we can raid.”1
Senior Government source, August 2018
Gross pension tax relief:
£38.6 billion2
Source: 1. Daily Mail, Philip Hammond 'plans to hammer the pensions of thousands of top earners to fund Theresa May's £20billion-a-year boost for the NHS‘, August 2018.
Source: 2. FCA, Regulators warn public of pension scammer tactics as victims report losing an average of £91,00 in 2017, August 2018.

22. £1 £2 33% Pension tax relief? Flat rate of relief: boost for every
Is legislation tipping the scales of regulation and weighing on advice?
Simplification of the tax relief system
Replace the lifetime allowance with a lower annual allowance
Introduce a flat rate of tax relief
Flat rate of relief:
33% £1 £2
boost for every
paid in

23. Learning outcomes
Is legislation tipping the scales of regulation and weighing on advice?
Examine the current key regulatory and legislative themes.
Identify the continued political, regulatory and financial planning challenges facing investors.
Recognise the potential advice opportunities that exist for intermediaries.

24. Thank you
RTL382562/10/18

25. Handset Question
Is legislation tipping the scales of regulation and weighing on advice?
Which criteria do you believe is most important when selecting or reviewing the suitability of a platform?
Usability
Products and funds offered
Cost
Other

26. Handset Question
Is legislation tipping the scales of regulation and weighing on advice?
Please indicate if you would like more information on Aegon’s platform proposition?
Yes No