Earlier this month, plans for a secondary annuities market were given the green light by the Government.
It was revealed that from 6 April 2017 an estimated five million people will be able to sell their annuity.
Annuity holders wishing to sell will, however, be required to seek independent financial advice for annuities above a certain threshold.
Financial Planner Richard Earl, who works with Cervello Financial Planning, believes the new market could potentially have a harmful effect on the perception of the profession.
He said: “Quite rightly, the Treasury and the regulator want to make sure that consumers don’t make bad choices by effecting a requirement to obtain independent advice if an annuity is over a certain level – that makes perfect sense.
“However, if advisers expend time and money to put themselves in the position to provide this valuable service then of course there will be a charge for this advice.
“What I know will happen, within months of this market going live, is talk of ‘greedy’ advisers who charged to sell the original annuity and are charging again to sell it back, which would be totally unfair to our profession.”
The Treasury has warned that advisers wishing to help clients in the new secondary market might be forced to take a new exam before doing so.
Mr Earl, who has over 24 years industry experience, previously working as an adviser IFA with the British Medical Association, said changing qualification requirements was just a fact of life for his profession.
He said: “Anyone who advises on pensions will have little option than to do whatever study or examinations are necessary to be an expert in this totally new market by the time it is launched. It’s what we have to do all the time, our profession is always changing and we have to keep up with it.”
He said the new market was positive in the sense it created greater consumer choice.
It also gives people the ability to “extricate themselves from a past decision that has always been irrevocable, and for a small proportion of annuitants this might be beneficial for them”, he said.
Martin Bamford CFPCM Chartered MCSI, managing director of Informed Choice in Surrey, recently expressed his own concerns that there will be serious risks attached to the new market. Read more HERE.