The Association of Professional Financial Advisers (APFA) has called for the Government’s new single guidance body to do more to encourage consumers to seek professional financial advice.
A new guidance body is expected to be established by 2018 to replace the existing functions of the Money Advice Service (MAS), The Pensions Advisory Service (TPAS) and Pension Wise.
In particular, APFA has called for the new body to emphasise to consumers that almost all financial advisers offer free initial consultations, and to assist consumers in finding financial advisers in their area.
APFA’s response to the Treasury’s consultation on its proposals says:
“It should also be highlighted that the initial conversation with an adviser is always free as the first meeting is the opportunity to discuss and, if the service is wanted, agree the fee arrangement going forward.”
In general, the Association welcomes the proposals, saying that “the current system is fragmented and confusing.” It goes on to express the hope that the levies paid by advisory firms to fund the new body will be lower than their existing MAS/Pension Wise levies, both because the new body should be able to make cost savings because of economies of scale, and because APFA is also calling for non-FCA regulated entities that currently fund TPAS to be required to continue paying for the new entity.
The new organisation will have five areas of specialism: occupational and personal pensions; guidance to help avoid financial fraud and scams; debt advice; guidance to improve financial capability; and financial education programmes for children and young people. It will also fund the provision of regulated debt advice.
Guidance on all five areas will be offered via telephone and online. Pensions and debt guidance, and maybe guidance in other areas as well, are expected to be offered on a face-to-face basis.
The organisation will be accountable to Parliament and supervision of its activities is expected to be carried out by the Treasury and/or the Department of Work and Pensions.
The new body is not expected to have a ‘brand’ as such, and throughout the consultation document it is simply referred to as ‘the single financial guidance body’ or ‘SFGB’.
The consultation on the proposals ends on February 13 2017.
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