In the March Budget this year, it was announced the Money Advice Service would be scrapped in favour of a new delivery model merging the functions of The Pensions Advisory Service and Pension Wise.
Chancellor George Osborne decided to replace Mas with a much smaller body to focus on providing “frontline” services to those in financial difficulty.
Now, Apfa has responded to the government’s consultation, stating funding should not fall solely on FCA regulated entities but on TPR regulated ones too, with occupation schemes also contributing to the new money advice service.
In Apfa’s response, the body has suggested that those pension providers that contribute to Tpas but are not regulated by the Financial Conduct Authority should continue to contribute via the Department for Work and Pensions to the support of the new body.
The response stated Apfa expects combining the current bodies will generate efficiencies and it will be essential that the new set-up will result in more efficient use of levy income and lead to future reductions in the cost of the pensions and money guidance bodies to the financial advice community.
Apfa added that it welcomes the government’s plan to restructure the delivery of public financial guidance and sees the creation of a new pensions’ guidance body as a step in the right direction.
However, the body stated in its response that it believed there was scope to go further to merge all three bodies.
Apfa recommended the new pensions guidance body work with other providers of information, guidance and advice by explaining to consumers the options available to them.
According to the body, the current Mas retirement adviser directory service should be taken over by the new pension guidance body and consumers should be referred to it.
The report following the Public financial guidance review: proposal for consultation published today (8 June) will be published in Autumn this year, according to HM Treasury.
Chris Hannant, director general of Apfa, said: “We welcome the creation of this new pensions’ body, as having all pension information from a single source will bring clarity and consistency for consumers and also generate efficiencies and cost-effectiveness.
“There was a need to streamline delivery that was becoming confused. The revised remit for Mas should remove duplication and bring greater focus on value for money in delivery.
“However, we lack clarity on funding. Part of the government’s rationale was to make cost savings and we would like assurances that the new set-up will lead to future reductions in the cost of public financial guidance. The funding model for the new pension body must be fair with contributions from all those that are likely to benefit – this should include those that are not regulated by the FCA.”
Scott Gallacher, chartered financial planner director at Leicester-based Rowley Turton said: “I broadly agree with the Apfa response regarding the merging of the three bodies as this should give simplicity as well as cost savings, although I would like to ensure that Tpas takes the lead in this.
“I also agree strongly that the cost of this new body should not just fall on FCA regulated entities and occupational pension scheme should also contribute to this.”
ruth.gillbe@ft.com
