§ Mr. DenhamTo ask the Chancellor of the Exchequer (1) what action he is taking to ensure that those individuals who have been wrongly sold personal pension plans are identified and given full redress;
(2) what is his estimate of the total number of individuals who have been wrongly sold personal pension plans (a) in each of the last five years and (b) since the introduction of the Financial Services Act 1986;
(3) what is his estimate of the total value of personal pension plans that have been wrongly sold (a) in each of the last five years and (b) since the introduction of the Financial Services Act 1986.
§ Mr. Tim SmithTo ask the Chancellor of the Exchequer if he will make a statement on the marketing of personal pensions.
§ Mr. Nelson[holding answer 6 December 1993]: The responsibility for regulating the marketing of personal pensions and other investment products rests primarily with the Securities and Investments Board, as lead regulator under the Financial Services Act.
Following the intial findings of a survey commissioned in September into the selling of personal pensions to clients transferring from occupational pension schemes, the chairman of SIB has today set out the action the regulators are taking to establish the extent of any problems that may have resulted from poor compliance with the marketing rules made under the FSA; to rectify any shortcomings; and to obtain remedy for any disadvantage to investors that may have resulted.
SIB is leading this regulatory action, working closely with the other regulators concerned and with the life insurance industry to establish the extent of the problem and any financial implications for personal pension policyholders. The evidence relates to non-compliance with the regulatory standards. Further detailed work will be needed to assess whether the non-compliance has resulted in poor advice and disadvantage to investors.
I welcome this initiative, together with the actions already taken by SIB to improve the guidance on the selling of personal pensions. Should the further investigations now under way reveal that any clients have suffered financial loss as a result of bad advice, I have made it clear to SIB that the Government expect effective remedies to be put in place promptly.
Personal pensions have proved their popularity, combining as they do an opportunity for a flexible career with the security of an income in retirement.
But as with other investment products people must be able to rely on high standards of professionalism and competence on the part of salesmen and advisers, and be confident that they will not be sold products unsuitable for their requirements.
I have asked the chairman of SIB to keep me closely informed as this work develops.