Advisers have welcomed MEPs’ rejection of draft rules to cap adviser fee rates, claiming the impact of the proposal would have been “devastating.”
The European Parliament voted last week to exclude a clause from the upcoming European packaged retail investment products regulations which would have capped advisers’ hourly charges at €200 (£167).
The clause states: “When an hourly rate is charged, the total amount charged for providing advice shall not exceed €200.”
Apfa director general Chris Hannant says the trade body has been “badgering” MEPs on the issue for some time.
He says: “I don’t think price caps work full stop. It is not clear whether the cap would have been imposed on all financial advice or limited to Prips products, but it could have had a cataclysmic effect on advisers.
“This is the parliament’s final word on it. The council has to approve its own version of the text and the two will then be reconciled, but I cannot see any member state putting forward anything as stupid as this.
“When the two versions are reconciled nothing new can be added so this should be the end of this proposal.”
Investment Quorum chief executive Lee Robertson says: “This was a stupid proposal and I am glad it has been thrown out.
“The impact of this would have been devastating. There is no way fees can be set centrally; a firm based in London has completely different costs to one based in Hull, let alone the differences in charges across member states.”
Evolve Financial Planning director Jason Witcombe says capping adviser fees would be detrimental to competition and consumer choice.
He says: “Advisers offer very different services and it is important consumers are able to shop around for an adviser who meets their needs.”