A consumer watchdog has called on the FCA to take swift and decisive action to fix "detrimental sales practices" in the annuities market before more damage is done.
Following the publication of the FCA report on the retirement income sector yesterday, the Financial Services Consumer Panel highlighted its concerns over firms offering sales on a 'non-advice' basis.
The organisation wants to see measures to address what it called "the persistent problems in the annuities market". The FCA report echoed its previous thematic review in concluding that the market was failing consumers.
Officials said the issues highlighted in the report, including mis-selling, provision of incomplete information and an opaque fee structure, were discussed at length in the panel's 2013 research and the subsequent study by the FCA. Annuities will continue to be right for some people, but poor practice must be tackled, it said.
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Consumer Panel Chair Sue Lewis said: "The panel is particularly concerned about the consequences of the growth in the non-advice markets following implementation of the Retail Distribution Review.
"This growth is in part driven by the reduced regulatory liability firms face when selling through this channel and also by the fact that commission can still be paid. Consumers may not understand when a sale is 'non-advised', or that they have reduced recourse to redress should things go wrong.
"The FCA needs to fix detrimental sales practices in this market before more damage is done. We urge the FCA to implement our recommendation to embed in its rules a code of practice for firms offering sales on a 'non-advice' basis. Today's findings confirm the need for binding standards."
She added the retirement market's problems were even more in need of resolving due to the greater pensions freedoms arriving in April.
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