The Association of IFAs (AIFA) today issues a stark warning to the FSA over the "unintended consequences" of applying proposals in the RDR to the corporate pensions (GPP) market.
It argues the move may "restrict" employee access to professional advice at a time they may need it most and create what it calls an "uneven playing field" between authorised advisers and those in the unregulated corporate space.
In its response to the FSA's RDR Feedback Statement, issued in November last year, AIFA says it is concerned some RDR concepts designed for the retail market are "being forced" on the corporate sector.
"With the shift from defined benefit to defined contribution pension schemes, employees are in ever greater need of advice on pension planning," AIFA director of policy Andrew Strange says.
"A significant unintended consequence of these proposals could be firms promoting direct-offer pensions without advice to consumers. This would be a backwards step and would reduce consumer access to advice."
AIFA is also concerned the proposals will create an uneven playing field between Financial Services and Markets Act (FSMA) authorised advisers and non-FSMA-authorised advisers.
"Advice to employers, even when identifying a specific GPP provider, does not generally amount to a personal recommendation and is therefore outside the scope of FSMA," Strange says.
"In applying the RDR to authorised advisers, FSA will unintentionally create an uneven playing field in the areas of qualifications and professionalism, between those caught by the wider RDR proposals under FSMA and those who are not."
Strange adds: "Our research disputes the FSA's claim the ‘predominant market model is for GPPs to be promoted to individual employees without personal advice'.
"When questioned, 93% of IFAs offered advice to an employer, which is generally out of scope, but 71% also offered personal advice to employees. This suggests the vast majority of IFA GPP business is conducted with individual regulated advice."
Market anticipates a May hike
Newly-formed Mobius Capital Partners
Failed to meet yield requirments
Almost tripled year-on-year
Stochastic modelling for decumulation