DWP could hand trustees role of policing consultancy charges

The Department for Work and Pensions (DWP) is looking at whether scheme trustees can play a role policing consultancy charges, according to Legal & General pensions strategy director Adrian Boulding.

In November 2012 pension minister Steve Webb wrote to the Association of British Insurers (ABI) calling for an urgent review of consultancy charging saying he had faced calls to introduce an outright ban.

The DWP is currently consulting on whether it is appropriate to use money that is contributed to a member’s pension pot to pay for advice.

Boulding (pictured) said the government was looking at alternatives to an outright ban and was examining whether trustees could play a role.

‘They are looking at the role of trustees in group personal pension schemes and contract-based schemes,’ he said.

He added that the DWP was investigating the corporate advice market and if it found enough fee-based advisers willing to give advice to employers then it was unlikely to allow consultancy charging.

He said providers were interested in making their products good value but did not have any control over whether advisers provided that, but if trustees are involved they would have a duty to look after members’ interests.