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Apfa calls on advisers to lobby MPs over guidance levy

Apfa is calling on advisers to lobby their MPs over the proposed levy for the at-retirement guidance guarantee.

The guidance, designed to support the Government’s flagship pension freedoms policy, was initially due to be funded through a duty on providers and trust-based pension schemes.

But in a consultation paper published in July, the FCA said the levy should be funded by all firms which are deemed to benefit from the guidance.

This includes advisers who come under the FCA’s A13 fee block and have annual income of more than £100,000, who could pay 30 per cent of the costs.

Apfa is urging advisers to write to their MPs to explain how the cost of the levy will be passed onto consumers.

Apfa director general Chris Hannant says: “We are holding in-depth discussions with the FCA over the allocation of the levy as we believe the current proposals will impose a disproportionate cost on the financial advice profession and increase the cost to the consumer as a result. This undermines the aim of the guidance guarantee.

“Ultimately parliament will decide what powers the FCA should have to raise this levy.

“We are therefore calling on members to write to their MPs to explain how regulatory costs affect their business, and asking that the legislation include a requirement that the guidance guarantee levy is allocated in such a way that it does not increase the cost of advice to consumers.”

Apfa has produced a template letter for firms to use.


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There are 7 comments at the moment, we would love to hear your opinion too.

  1. APFAs faith in our Parliamentarians is truly touching. Even if they had a clue of what we are talking about does anyone think they would give a toss? After all their coterie and acolytes all think we are venal unethical sharks. As has recently so clearly been demonstrated at the party conference season.

  2. Most intermediaries already provide guidance at no charge to prospective new clients as part of their initial consultation ~ and will probably continue to do so for clients whose guidance from the likes of the MAS has concluded that they should seek out the services of a regulated and qualified adviser. So what will have been achieved by creating an additional stage in the process?

    The FCA is unlikely to modify its stance, as a lesser share of the overall levy for intermediaries can only mean a bigger share for other sectors, who may well argue that they shouldn’t have to pay more. Instead of lobbying the FCA over how much we’ll be required to pay, APFA should be challenging the rationale for any levy at all.

    What will happen to the £20m the government has supposedly earmarked towards the cost of delivering the Guidance Guarantee? Is APFA asking any questions about that?

    And, whilst on the subject of issues that APFA ought to be tackling but appears not to be bothering with, what’s it trying to get done about the £118m we were overcharged by the FSA?

  3. @Harry I have put the case directly to a politician at the Treasury. My argument was based on the financial facts of the situation and I explained simply and clearly to him that this should not be paid for by advisers but from the public purse. As it is a service for the public good.

    I honestly don’t think he was listening to a word I said to him.

    And still no cost benefit analysis of the guidance guarantee service produced by the Treasury.

    I am afraid this is a done deal all we wait for now is the FCA response to their consultation paper and then we get out our cheque books (once again)

  4. From the end posts from the C Rookes article, most of the TSC seem to think MAS is funded by the public purse, so what help do we have to convince the rank and file MP,s that we will pay (amongst others) this guidance levy !!

    Like Nick above (I wrote) my MP didn’t seem to have a Scooby Doo what I was talking about let alone worried about the cost and who would pay it, but then why should he it not coming out of his pocket !!

  5. @ Nick

    Sad innit. And this is supposed to be a democracy. Government by the Patricians.

  6. Up until the last General election we had a Pfizer’s scientist as a Labour MP, he was succeeded by Laura Sandys (con) who announced she was not standing at the next election, and Lib Dems always loose their deposit in my area. Then only candidate I have even heard of therefore is one Nigel Farage. Now, I could try and put my case to the current MP, or shall I just leave it as bearing in mind Rochester has fallen to UKIP…….
    As to what we should do with regard the MAS levy next year if it included covering the guidance guarantee? Personally, I think we ALL need to refuse to pay it. Not just some of us so they can divide and conquer, ALL regulated firms and advisers. I don’t mind paying my current MAS levy (it is peanuts), but K object to Ms Rookes insults and paying for something extra my clients and I will not benefit from. This should be general taxation if MPs think it worth paying for.

  7. In this picture, Chris Hannant looks like he’s just realised he’s stepped in something he rather wishes he hadn’t.

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