Money Advice Service could spell end for mass market IFAs
Advisers are concerned the Money Advice Service (Mas), which was launched yesterday (4 April) as a replacement for the Consumer Finance Education Body, could be an FSA sponsored plan to see the end of the IFA for the mass market.
Derek Bradley, chief executive of PanaceaIFA, expressed anger that the new nationwide service is funded by £43.7 million in funding from fees raised from financial services firms regulated by the Financial Services Authority (FSA).
Mr Bradley said that although the service was a "great initiative", it was questionable whether it is "appropriate" that it is funded by IFA firms "from the income they derive from providing financial advice".
"Should [IFAs] fund a project that has the potential - intentionally or not - to put them out of business by providing advice that firms would and could charge for post Retail Distribution Review?
"Why use an IFA if you can use the Mas?"
Alan Lakey, said he doubted the Mas would be successful as the mass market was unlikely to walk into the service and ask for advice.
He said: "The government, the Treasury, Mark Hoban, who ever you want to use for a guide, appear to be of an opinion that people are clamouring for an advice market.
"All we have to do is go back to stakeholder pensions in 2001 and see the problem is that people are apathetic.
"It is a hell of a shame given that my money goes to fund this. It is the old phrase of turkeys voting for Christmas.
"Our funds are being used to allow other people to market against us."