Standard Life has been accused of overstepping the line between advice and guidance in a letter that suggests clients switch to a higher-charging fund.
The provider has written to thousands of customers urging them to review whether its Annuity Purchase fund is still suitable for them. The letter says the fund is designed for customers who are planning to buy an annuity.
It says for those who are yet to decide how to take their pension, Standard Life’s Active Plus II pension fund “is an alternative option”.
The letter says: “The mix of investments in this fund is considered appropriate if you have yet to decide how you’re going to take your retirement income.”
It explains this fund costs 0.11 per cent more than the Annuity Purchase fund.
Former FSA head of retail policy and regulatory consultant David Severn says: “This may well be construed by a reader as advice to take a particular course of action.
“This letter is sailing close to the wind on the FCA’s definition of advice.”
Standard Life claims the letter was only sent to non-advised clients, but HCF Partnership financial adviser Ian Bennett says one of his clients received a letter.
Bennett says: “This letter strays into regulated advice without knowing the facts of the client.”
A Standard Life spokeswoman says: “This communication is intended to provide information and prompt customers to consider taking action if they aren’t intending to buy an annuity when they retire.”