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Aifa fears over unregulated advice by employers

Aifa is warning that key Treasury proposals allowing emp-loyers to provide unregulated financial advice to their staff could lead to misselling.

The pre-Budget report issued on Monday includes plans to broaden the exemption of employers providing advice to their staff on work-related fin- ancial matters.

But Aifa deputy director general Fay Goddard says the proposal, part of the Government’s 10-point plan to modernise financial services regulation, could generate misselling if not monitored carefully.

Aifa is also concerned that separate Treasury plans to bolster FSA powers to bypass consultation could see IFAs’ interests ignored.

In its latest plans to reform the Financial Services and Markets Act, the Treasury proposes allowing the FSA to avoid consulting on rules where it considers a delay would be prejudicial to the interests of anyone affected by the rule and where it considers that the changes would only have a minor effect.

Under current rules, the FSA can only skip consulta- tion if it considers that a delay would damage consumers.

Aifa deputy director gen- eral Fay Goddard says there is a danger that the FSA will concentrate on the impact on prov-iders and ignore IFAs’ interests and is urging the regulator to consult with trade bodies.

Goddard says: “The Treasury needs to ensure there is not too much relaxation and that, while employers are allowed to promote their own schemes, we do not have inexperienced people giving advice.”

Pension Transfer Solutions managing director Carl Mel-vin says: “If this advice results in misselling claims further down the line, who picks up the tab?”

A Treasury spokesman says: “The issue of misselling does not really arise as emp-loyers would not be expected to provide any person-spe-cific advice but point tow- ards someone who is quali- fied to do so.”


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