Apfa has hit out at levy proposals for the Budget retirement guidance service after the FCA revealed advisers could be forced to pay 30 per cent of the costs.
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 today, the FCA says 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 director general Chris Hannant says: “It is inappropriate advisers are being asked to foot the bill for a solution to a problem that was not of their making.
“The FCA has also made an error of judgment in deciding which firms will benefit from the guidance. While it is true that other fee blocks will necessarily benefit, as the money will definitely end up with a product provider, advisers will not necessarily benefit because not everyone will choose to take advice.”
The Budget pension reforms were announced following widespread criticism of the annuities market, centred on a lack of effective competition driving poor value for consumers.
Hannant adds: “The FCA must continue to monitor the market to ensure the guidance service is more than just window dressing.
“The reforms make it easier for consumers to stay with their current pension provider and use their pension as a drawdown account, which suggests there will be even less movement in the market.”