The Financial Conduct Authority (FCA) has proposed in a recent consultation paper that advisers should pay 30 per cent of a guidance bill…
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div>The Financial Conduct Authority (FCA) has proposed in a recent consultation paper that advisers should pay 30 per cent of a guidance bill.
The FCA has proposed that advisers, dealers and brokers should be liable to contribute 30 per cent towards a new levy which pays for the Government’s guidance guarantee service.
At this stage, the FCA have stated that it believes there are three options for how to allocate the overall levy across the five retirement guidance fee-blocks, where the regulator is seeking views on the three options.
The first option in the papers stated that the levy would be allocated across the five retirement guidance fee-clocks, where advisory arrangers, dealers or brokers were proportioned to pay 30 per cent. The second highest were deposit acceptors, proposed to pay at 28 per cent of the bill.
The main advantage of the allocated proportions was said to be transparency, as it is clear to firms on what basis the allocations are made.
The main disadvantage of this option is the amounts of AFR the FCA allocate to the separate fee-blocks represent the proportion of its resources applied to meet its statutory objectives in relation to the regulated activities covered by the blocks.
The second option proposed an equal split of allocation, where the overall levy would be allocated equally across all fee-blocks at 20 per cent each.
The FCA stated that the main advantage of this proposal is the simplicity of it. However, it does result in the five fee-blocks having less distinction.
The last option offered up, mentioned the allocation of the overall levy being in line with consumers’ retirement choices.
The main advantage of this third option would be that a greater link would be created between the allocation of retirement guidance costs and consumers choice of financial products. The FCA stated that if this last option was to be accommodated, then it would need to have an availability of industry-wide research or surveys towards the products and services consumers are choosing.
The FCA have invited firms and their representative trade bodies to propose whether there is enough information available for the third option, or if it is possible for such information to be available in the future.
The regulator has also asked for feedback on all three options and welcomes anyone who disagrees with them to advise the authority of alternative options.
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