View more on these topics

Aifa warns FSA over corporate pensions RDR proposals

The Association of Independent Financial Advisers has warned the FSA that the retail distribution review proposals for the corporate pensions market risk restricting access to advice.

Aifa director of policy Andrew Strange says the FSA has given too little time for an industry wide consideration of the issues and says there is insufficient evidence to justify implementing proposals for the retail financial advice sector into the corporate pensions market.

Strange says: “The corporate pensions market is a complex and unique area of financial planning. I am concerned that we have been given far too little time for an industry wide consideration of the issues within this market, and that RDR concepts designed for the retail market are being forced upon the corporate sector. Also, the attempt to look at the market in isolation from other aspects of the RDR proposals, such as factoring, is also fraught with potential problems.

“There is a real danger that an unintended consequence could be reduced access to regulated advice. The proposals could destabilise a well organised, consumer driven market. With the shift from DB to DC pension schemes employees are in ever greater need of advice on pension planning.

“FSA must ensure its proposals do not make it even harder to access professional financial advice. A significant unintended consequence of these proposals could be firms promoting direct-offer pensions without advice to consumers. This would be a backwards step and would reduce consumer access to advice.”

Aifa is also concerned that the proposals will create an unlevel playing field between Financial Services and Markets Act authorised advisers and non-FSMA-authorised advisers.

Strange says: “Advice to employers, even when identifying a specific GPP provider, does not generally amount to a personal recommendation and is therefore outside the scope of FSMA. In applying the RDR to authorised advisers, FSA will unintentionally create an unlevel playing field in the areas of qualifications and professionalism, between those caught by the wider RDR proposals under FSMA and those who are not.

“Our research disputes the FSA’s claim that the ‘predominant market model is for GPPs to be promoted to individual employees without personal advice’. When questioned, 93 per cent of IFAs offered advice to an employer, which is generally out of scope, but 71 per cent also offered personal advice to employees. This suggests that the vast majority of IFA GPP business is conducted with individual regulated advice.

“FSA’s proposals will therefore create a significant imbalance between FSMA and non-FSMA sectors. This could drive advisers to switch sectors, which would reduce access to individual personal advice. This would run counter to FSA’s proposals and the wider interests of UK public policy.

“Aifa would welcome engaging with the regulator to consider further research on this issue, which was not possible under the current time constraints.”


Confused tribe is the top target for cover campaign

The primary target audience for the consumer protection insurance campaign should be the 15 million UK consumers that market research has categorised as “confused and disengaged”, many of whom already own some form of protection product.

‘The most positive development I have seen in the industry’

Kevin Carr, director of protection, Pru Protect

“This campaign is one of the most exciting and positive developments I have seen in the protection industry. To get 22 insurers this far is a great success and the first phase has delivered a highly intelligent and professional piece of work that quite possibly would not have otherwise existed.

Loss of James Hay contract contributed to GBST loss

GBST Wealth Management, formerly Infocomp, has said the cancellation of the James Hay contract in December 2008 contributed to its 44 per cent drop in earnings before interest, taxes, depreciation, and amortisation during the 2009 financial year.

China’s economic bounce may already be over

By Mike Riddell (17 May 2016) Most people would explain the rally in global risky assets since mid-February as being primarily down to the spectacular volte-face from the Federal Reserve, where Janet Yellen (and others) dramatically toned down their narrative that the Fed would be hiking rates as many as four times in 2016. This explanation […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm