Government proposal to remove barriers to Trustees communicating helpful information to members

How should Trustees advise on pensions and what are the barriers to communicating helpful information to its members? The main issue is that there is a lack of clarity by way of guidance and legislation between what constitutes information, support and guidance on the one hand, and regulated advice on the other.

For that reason, Trustees must (given the risk of criminal penalties and member claims for financial loss) err on the side of caution lest they inadvertently stray from helpful guidance into regulated financial advice. Even providing access to independent financial advice, or signposting external digital platforms / modellers which present tailored information to members based on members’ data / responses to questions could potentially result in providing regulated advice, for which the Trustees could be held liable if the member suffers a loss.

Further, Trustees must also be cautious in sending what they consider to be helpful information to members by the Privacy and Electronic Communications Regulations 2003 (PEC Regulations) because those regulations restrict the provision of direct marketing by electronic means.