The Association of Professional Financial Advisers has submitted evidence to the Work and Pensions Select Committee inquiry on pension freedom and advice, stating that more should be done to lower the price of advice by lowering the cost of regulation.
The response also called for more clarity for advisers in respect of liability and for Pension Wise to explain the value of financial advice better.
Additionally, the submission also gives new evidence of advisers’ experience since April.
Nearly nine of 10 advisers - 87 per cent - had received an enquiry about getting financial advice as a result of the pension reforms, according to research conducted for Apfa by NMG Consulting during July amongst 240 advisers.
On average, the number of new enquiries was eight, which Apfa said enables a rough estimate about the total number of enquiries, as being in the order of 150,000. The organisation added that these enquiries will not have led to people becoming clients and will not be unique.
The research also showed that over half of advisers - 55 per cent - said they had received a request for advice on a transfer from a defined benefit pension scheme to a defined contribution scheme, while one in four advisers had received an enquiry in relation to other safeguarded benefits.
Chris Hannant, director general of Apfa, argued that much more needs to be done to help consumers access financial advice.
“Our research indicates there is an appetite for advice out there, but this isn’t always translating into people receiving advice. We need to lower the cost of regulation to lower the price that clients have to pay.
“Most barriers to a thriving and varied advice sector come from unfair rules surrounding liability, including: the lack of a ‘longstop’ for advisers and the levy approach of the Financial Services Compensation Scheme which penalises regulated advisers for those unregulated investments which go wrong as well as imposing an unpredictable and seemingly ever-increasing fee burden.”
ruth.gillbe@ft.com
