Advisers have accused Labour leader Ed Miliband of bandwagon-jumping and failing to appreciate the changing marketplace after he called for an end to “rip-off” pension charges.
In London this week, Miliband (pictured) said if Labour were in power, he would introduce a Consumer Bill in next week’s Queen’s Speech to give the regulator and the Competition and Markets Authority powers to “stop rip-off surcharges by banks, low-cost airlines and pension firms”.
Evolve Financial Planning director Jason Witcombe says: “It is a lovely bandwagon to jump on. Surcharges are annoying and throwing pensions and banks in allows a bit of bank-bashing which everyone loves but transparency is increasing and if people know what they are paying, then they can make a proper choice.”
One Life Wealth Planning financial planner Nick Evans says: “It should not be for regulators to have an ultimate say on how firms make money, as long as that firm is being transparent.”
Max Horne Financial Services partner Max Horne says: “If you have regulators pressing down on prices, you end up with vanilla products that might not work for clients and you run the risk of firms not being able to make money.”
The new Financial Conduct Authority is intended to be a “value for money” regulator. It will not directly regulate prices but will try to spot consumer detriment and flaws in competition by looking at “comparative prices”.
In February, Labour Shadow Treasury financial secretary Chris Leslie said he wanted the FCA to regularly review product pricing and make recommendations to ministers if it identifies a need for intervention.
Miliband raised the issue of pension fees and bank charges in January in an attack on “rip-off” Britain. He warned against “underhand predatory” practices and said if charges do not come down, he would move to cap them.