2017年-FCA英国金融行为监管局_review_of_annuity_sales_practices_tr16_7_3页_129kb

Summary of Regulator Assessment: TR16/7 Review of Annuity Sales Practices

Core Content

The FCA conducted a thematic review (TR16/7) to assess the sales practices of firms that sold annuities to their own customers on a non-advised basis between May 2008 and April 2015. The focus of the review was on whether firms provided sufficient information about enhanced annuities (also known as impaired life annuities) during these communications.

The review aimed to determine if customers were made aware of their potential eligibility for enhanced annuities and if they were informed that shopping around for annuities could result in a higher income. Firms were asked to evaluate their information provision throughout the sales process to ensure it was clear, fair, and not misleading.

Key Findings

• There was no evidence of an industry-wide or systemic failure to provide sufficient information about enhanced annuities.
• A small number of firms returned high failure rates, which may have led to customer loss.
• These firms were required to conduct a formal review of their past sales practices, using Skilled Persons appointed under the FCA’s powers.
• The FCA provided a mechanism for redress, though this is not included in the Impact Assessment as it is firm-specific.

Affected Businesses

• The review applies to firms selling annuities to their own vesting customers on a non-advised basis during the review period.
• A total of 33 firms were initially identified, but due to mergers and sales, this number was reduced to 28 firms.
• These 28 firms are expected to have internally vesting pension customers within the scope of the review.

Cost Breakdown

The estimated average cost per firm for completing the review is £10,000, with the following components:

• Familiarisation cost: £96 per firm (based on reading time for a 35-page document).
• Gap analysis of written communications: £5,000 per firm.
• Gap analysis of call handling processes: £5,000 per firm.

Total estimated cost across all 28 firms: £280,000.

Cost Estimation Basis

The cost estimates are based on:

• A compliance officer’s hourly rate of £48.
• A reading rate of 100 words per minute.
• A middle payment level contractor’s rate of £500 per day.
• Two external sources:
  • Robert Half salary guide (2016)
  • EFTEC method paper: Evaluating the cost savings to business from revised EA guidance (2013)

Impact on Business

• The cost of the review is incremental and not material to firms' operations.
• The effort is considered part of routine compliance reviews, rather than additional or supplementary work.
• Firms are expected to digest the findings and consider any necessary changes to their sales processes or communications.
• There is no expectation of wide-reaching or expensive changes to processes or staff training.

Additional Information

• The Thematic Review document can be accessed at: TR16/7 Review of Annuity Sales Practices
• The Robert Half salary guide (2016) is available at: Robert Half Salary Centre

Conclusion

The FCA's TR16/7 review highlights that while there was no systemic failure in the provision of information about enhanced annuities, certain firms may need to undertake a formal review of their past sales practices. The costs associated with this review are relatively low and are expected to be absorbed within existing compliance functions. The review serves as a reminder for firms to ensure that their sales practices align with existing regulatory standards and that customers are adequately informed.