Greater legal protection around pensions

Monday 04 April 2022

Islanders will now have greater legal protection when they receive retail advice on Jersey-approved arrangements.

It comes after two key pieces of legislation were passed by the States Assembly in February and have since become law.

Both pieces of legislation will mean that any retail advice given to local consumers about their pension arrangements, will fall within their financial regulation. 

Independent financial advisors or other business providers who are offering this type of advice to Islanders will need to be licensed.

Providers who offer this type of advice will need to perform a suitability assessment with the individual and provide them with a Suitability Letter, which sets out their goals, which products have been discussed, which product the consumer has opted for and its charging structure.

Previously, a Suitability Letter was only required for advice given by a provider in respect of the transfer of a consumer’s defined benefit pension to another approved pension arrangement.

However, following consultation with industry and Islanders, there is now greater legal protection when Islanders are receiving retail advice on their Jersey approved pension arrangements.

It is anticipated that the next phase – which will begin later this year - is to give islanders access to a free complaints and arbitration process.

Assistant Minister for Financial Services Constable Richard Buchanan – who lodged the legislation – said: “I’m pleased to be able to announce the first phase of pension regulation. 

“This change will help protect consumers by making sure that they have appropriate and transparent advice.

“I promised these changes as part of my election manifest because they are so important for Islanders planning for retirement, especially given the current economic climate. 

“It is my hope that in the future we will have full pension regulation across both regulated and private pension businesses.”