An amendment to the Financial Services Bill proposed by two Labour peers could open up the possibility of financial advisers not having to be regulated if they do not charge for their services.
The bill, which will formally create the new twin peaks regulatory regime, is currently in its committee stage in the House of Lords, having already passed largely untouched through the House of Commons.
Presented by Lord Peston and Lord Barnett, the amendment would affect applications for permission to carry on regulated activities.
It says: "An application for permission must include a statement as to whether the regulated activity is charged for, and in a case of an individual who provides the financial advice without charge, no permission is required."
Chris Hannant, policy director at AIFA, said the bill would take precedence of any existing FSA rules, even if it flies in the face of the retail distribution review (RDR) aims, although he questioned the intentions of the amendment.
"They might have put it down as it gives them a chance to raise certain issues," he said. "Until we hear the debate, it is hard to understand what they are trying to achieve.
"It may be designed to try and exempt people who are doing some pro bono charity work."
Meanwhile, a raft of other amendments, set to be debated over the coming weeks, focuses on consumer access to financial advice and services.
Two of the amendments, submitted by Lord Flight, add extra clauses to the sections of the bill addressing the Financial Conduct Authority's responsibility for consumer protection and competition.
They add that the regulator must have regard for "the ease with which consumers can access regulated financial services that meet their needs".
A separate amendment tabled by Lord McFall, meanwhile, says the competition objective must have regard for consumers' "ability to easily access financial advice".
|Comment||No charge? Then no need to be regulated, say Labour peers|
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Advisers and providers gathered at the Grand Connaught Rooms in London on 20 November to celebrate the ingenuity and the graft displayed in the protected product arena throughout the last 12 months. These awards are growing in popularity every year, and our congratulations go to the winners and highly commended.