The Association of Professional Advisers also told the Government that the Pension Wise levy on advisers should be binned.
APFA has proposed the radical overhaul of the current organisations in a submission to the Treasury’s public financial guidance consultation, which was launched alongside the Financial Advice Market Review. Today is the final chance to comment.
The APFA report stated: “We believe that public financial guidance should be rationalised by merging the three entities of Pension Wise, MAS and TPAS into one body. This would bring clarity and consistency for consumers and also generate efficiencies and cost-effectiveness.
“Reducing the regulatory bill for firms ultimately affects the amount firms charge for services. At the end of the day, the consumer pays and the higher the cost of advice, the harder it is for consumers to access affordable advice when they need it.
Do you agree that Pension Wise, Money Advice Service & The Pension Advisory Service should be merged into 1 body?
— FP Today (@FPTodayNews) December 22, 2015
“The recent government figures also indicate that one third of people who use Pension Wise, plan to see a regulated adviser, yet a portion of these are likely to be deterred when they realize the cost involved. Reducing the cost of advice would go some way in addressing this problem.”
APFA said that the three streams of levy funding for debt advice, money advice and pension advice via the TPAS levy should continue but the Pension wise levy should be scrapped.
It said the take-up has been too low to justify the service.
With 40,600 sessions so far, APFA cited figures that showed each guidance appointment cost approximately £496.
APFA said: “This represents poor value for money, especially as the median hourly rate for a financial adviser is £150 and an initial financial review and report from an IFA is £500 according to a recent Unbiased survey.”