Value for money – the new regulatory focus

Financial services firms are having to do a great deal of work on assessing the value of their products, units in their funds, along with pension arrangements. Such assessments are inherently difficult and imprecise, but Adam Samuel hopes the FCA will hold its nerve and extend this approach across the entire regulatory landscape.

Adam SamuelBA LLM DipPFS MCISI FCIArb Certs CII (MP&ER) Barrister and Attorney may be contacted atadamsamuel@aol.com.For links to where you can buy the second edition of ‘Consumer Financial Services Complaints and Compensation’, see www.adamsamuel.com/book.

The Financial Conduct Authority’s latest customer-facing obsession is ‘value’. On 1 October 2021, the regulator introduced PROD 4.2.14A-S on this subject into its rules and guidance on insurance product governance. Three days later, the Conduct of Business Sourcebook (Assessing Value for Money in Workplace Pension Schemes and Investment Pathways: Requirements for IGCs and GAAs) Instrument 2021 came into force. This expanded the obligation contained in COBS 19.5 and imposed on Independent Governance Committees and Governance Advisory Arrangements to assess the value provided by money purchase occupational schemes and pathway investments designed to help customers in drawdown who have no idea of the funds in which they should invest their pensions.