Apfa has called on the FCA to clarify whether advisers need to hold a consumer consumer credit licences.
The FCA will take over the regulation of consumer credit from the Office of Fair Trading in April. In October the regulator published a consultation on how it plans to charge advisers for consumer credit licences when the new regime comes into force.
But in its response to the consultation, published yesterday, Apfa argues there needs to be more clarity about whether advisers require consumer credit licences at all.
The trade body says there needs to be more regulatory guidance on what is considered as “debt counselling”, as advisers have to consider existing debt as an ancillary part of the advice service.
It also wants clarity on whether advisers need to hold a consumer credit licence if firms allow clients to spread the cost of advice, and where firms are paid on a retainer basis via regular monthly payments.
Apfa also questions whether advisers that act as mortgage brokers need to hold licences where they are recommending first charge mortgages.
The trade body hit out at advisers having to pay for interim authorisation, particularly when they had paid for “indefinite licences” from the OFT.
Apfa director general Chris Hannant says: “There is considerable uncertainty about whether or not financial advisers require consumer credit licences for their usual activities. Our belief is that many will not.
“Guidance from the OFT is far from clear, meaning many advisers currently hold licences for various consumer credit activities purely as a precautionary measure.
“However, since the publication of the FCA fees paper it is clear the cost of applying for some of these licences means this will not be a viable option for ‘just in case’. There needs to be clarity so firms can take a sensible decision on whether a licence is needed.”