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Guidance levy cut for advisers

The FCA has cut the levy advisers would have to pay towards the guidance guarantee, which comes into action in April.

The regulator published its standards for those responsible for delivering the guidance guarantee in the CP14/26 consultation paper, proposing policy changes for regulatory fees and levies for 2015/16.

The proposed allocation of the levy has been cut by 60 per cent for advisory arrangers, dealers and brokers from 30 per cent to 12 per cent. However, it is still unclear what the monetary amount will be.

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The FCA also admitted within the paper, “Advisers will only benefit if, following using the pensions guidance service, consumers seek advice from regulated advisers.”

Unsurprisingly, the paper revealed the majority of individual adviser firms did not agree with using the existing FCA fees framework or proposed pensions guidance fee-blocks, compared to 100 per cent of other respondents who did.

Yvonne Goodwin, director of Leeds-based Yvonne Goodwin Wealth Management, said she does not think the levy is fair for advisers as it is ultimately clients that will have to pay for it. “I think what the FCA has done is started off with a high figure to get everyone annoyed and then later come out with a lower figure of 12 per cent which people think is a drop. But in reality, we don’t know what it is a percentage of. How are we supposed to know how much it’s going to be?”

She added that she believes the FCA does not think many people will take up the guidance guarantee, but has suggested that when retirees get their retirement pack, there should be a voucher for advice. However, when it comes to who should foot the bill, Ms Goodwin said the fund management groups should.

“When you look at the amount of marketing they do, then you think some of that could go towards helping out the consumers,” she said.

Responses to the paper can be made to the FCA until 2 February.