Jersey islanders now have greater legal protection when they are receiving retail advice on their Jersey approved pension arrangements.
The Financial Services (Amendment of the Law No. 6) (Investment Business) (Jersey) Regulations 2022 and the Draft Financial Services (Amendment of Schedules to Law) (No. 3) (Jersey) Order 2022 were approved by the States Assembly on 8 February 2022 and have since become law.
Together, the two pieces of legislation mean that any retail advice given to local consumers about their pension arrangements will fall within financial regulation overseen by the Jersey Financial Services Commission. Independent financial advisors or other business providers who are offering this type of advice to Islanders will need to be licensed.
Also, in offering this type of advice, providers will need to perform a suitability assessment with the individual and provide them with a Suitability Letter. The Suitability Letter sets out the consumer’s goals, which products have been discussed, and 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.
The change is part of the first phase of pension regulation. 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. This will be done by widening the scope of the Channel Islands Financial Ombudsman to include the managers or operators of employers’ private occupational pension arrangements.
Assistant Minister for External Relations and Financial Services, Connétable 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.”