The Jersey government sees regulation of pensions advice as necessary and likely to become a reality sooner rather than later, Jersey Financial Services Commission director general John Harris told a gathering last week, according to a Jersey publication which had a journalist present at the event.
The Jersey Evening Post said the initiative to regulate pensions provision and consumer credit “could get under way before the summer”.
Harris’s comments came in answer to a question that came during the JFSC’s annual business plan presentation, the JEP report noted.
It said that the questioner had referred to the transfer of funds from UK final-salary pensions to Jersey structures that might enable pensioners to use that money for unsuitable or risky sophisticated investments – a problem, the publication noted, “that has in recent years resulted in high-profile court cases”.
Last year, in fact, the Jersey FSC “was prompted to launch a public campaign warning of the dangers of putting life savings into ‘too good to be true’ funds promising unrealistically high rates of return”, the JEP went on, referring to what was described at the time as part of “an island-wide public awareness campaign to highlight the growing issue of investment mis-selling in Jersey”, in response to “the increasing number of cases that the regulator has been dealing with, where local investors have lost some or all of their life savings after making high risk investments”.
That campaign was focused on Jersey investors, however, rather than, as the questioner had mentioned, UK investors seeking a safe place for their final-salary pension pots.
In his remarks, Harris, pictured above, noted that although pensions advice was regulated to some extent under Jersey’s current investment regulations, neither the provision of pensions nor consumer credit was covered in Jersey, unlike in most other jurisdictions, including the UK.
The JEP quoted Harris as saying that “some form of pension regulation is needed and I do not think we will need to lobby the government on this”.
He said it wasn’t acceptable that people were being advised to take money out of their final-salary pensions except in certain circumstances, for example, in which the benefits of a private pension plan could be properly replicated.
“We take fully on board what is being said, and we are looking to become more demanding in these two areas.”
To read the Jersey Evening Post‘s story in full, click here.