An MP has called for the Government’s regulation moratorium on businesses employing fewer than 10 people to be applied to small IFAs with regard to the retail distribution review.
The moratorium was announced by Chancellor George Osborne in his Budget statement last week and exempts all businesses employing fewer than ten people and all genuine start-ups from new domestic regulation for the next three years.
During the Budget debate this week, Conservative MP for West Worcestershire Harriett Baldwin called on Treasury financial secretary Mark Hoban to raise the issue with the FSA..
She said: “I suggest that he take this opportunity to suggest that small IFAs employing fewer than ten people might be exempt from the increased regulation in the retail distribution review.”
In a separate debate in Westminster Hall on access to financial services in rural areas, Shadow Treasury financial secretary Chris Leslie said he was concerned about the impact the RDR and the FSCS levy would have on the ability of people to access advice.
He said: “There are a number of factors coming together here, some of which have perfectly reasonable arguments behind them, but which together could place at jeopardy the ability of individuals to get free or low cost advice.”
Hoban said Leslie “should be aware” advice is not free and the RDR was intended to make charging for advice more transparent and that the increased qualification level was there to improve the quality of advice.
Earlier this month Leslie pressed for a review of the FSCS including subclasses.
Hoban said: “If he thinks the FSCS levy should be reformed and someone else should pick up the levy, he should be clear which sectors. The scheme at the moment ensures sectors swallow their own smoke”