Banks will have to explain product advice: Ministry of Finance: Banks must disclose the variables in their pension advice models, which vary from bank to bank, and their effect on the recommendations.

The Ministry of Finance will require banks to disclose the main factors of their pension advice models and their effect on recommendations to customers, under a draft circular published Supervisor of Capital Markets, Insurance and Savings Yadin Antebi.
Article 14 of the Supervision of Financial Services Law (Pension Consultancy and Pension Marketing) requires the pension advisor to provide the customer with a written document (reasoning document) during the consultancy detailing the reasons for the advisor's recommendations about the worthwhileness of the savings from the pension product. The draft circular details the formulation of this document and the information to be included in it.

The draft circular states, "A pension advisor or marketer (bank or insurance agent) must include in the reasoning document specific details of all the considerations when advising the customer about the type of pension product, the pension product, and the most suitable financial institution, including the main factors in the consultancy model and their effect on the recommendation."

The banks' preparations for providing pension advice includes building pension consultancy models. Although the models include variables such as size, yield, demographic risk, regulations, stability, and membership, each bank gives a different weight to the variables, and the considerations have until now been kept confidential as commercial secrets.
When a bank recommends that a customer transfer savings from one institution to another, the bank must make the transfer within one business day, and give the customer a copy of the reasoning document. The bank must keep a copy of the reasoning document for seven years from the date of the handling of the customer. The Ministry of Finance also ordered that the bank must send a copy of the reasoning document to the customer within seven business days from the date it provided pension advice.