FCA proposes choice architecture for pensions dashboards

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The Financial Conduct Authority is consulting on new guidance for firms operating pensions dashboards and is making changes to the rules it proposed previously around data export. The consultation is open until 8 May. 

The City watchdog is proposing to include dashboards guidance in its Perimeter Guidance Manual to help companies understand when they need to obtain FCA authorisation and permission. 

In addition, to make it clearer when a consumer accessing dashboards leaves the FCA-regulated area, the authority is proposing requirements for a dashboards choice architecture.  

FCA’s causal chain for the choice architecture proposal
Source: FCA
Dashboard operators will have to make consumers aware of a range of possible next steps. The FCA said: “Our view is that consumers have a core set of choices which the PDS firm should make them aware of, and actively offer, no matter which firm’s PDS the consumer uses.”

They include: 

Dashboards operators will need to keep records of the choices they offered, how many people selected each choice, and exit communications for six years under the FCA’s proposals.

When a user is about to leave the dashboard itself, the FCA proposes that operators must clearly state that they are leaving the regulated dashboard service, explain where they are being redirected to, that what they see next is independent of the dashboard and will not be subject to the same requirements, and that they should not make financial decisions based only on data seen on the dashboards.

Apart from introducing the choices architecture, the regulator wants to revise its previous data export proposals by removing the option for data export to a dashboards service firm or connected person for investment advice.

“This change does not prevent the consumer from sharing their view data with an adviser or advice firm for the purposes of investment advice. It also does not deny PDS firms the ability to offer investment advice to their PDS users,” the FCA argued. “Rather, where a consumer wishes to share their data with an adviser/advice firm delegated access would be a consistent and secure mechanism for this.”

The change would also mean that dashboards firms with the advice permission would access the view data on the same terms as any other advice firm the consumer has given consent for.

“This would create a level playing field between integrated and standalone advice firms,” the regulator noted.

The paper is the second on dashboards by the FCA, though it has not yet responded to its consultation from December 2022. The regulator said it will consider feedback to both consultations before finalising its rules and perimeter guidance and publishing a policy statement, probably in the fourth quarter of this year. 

Do you agree with the FCA's proposals on choice architecture and data export?

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