Brexit volatility
The trade body said that the “upheaval and uncertainty” in the financial markets caused by Britain’s decision to leave the EU means the regulator should put on hold plans for a secondary annuity market, scheduled to launch in April next year.
“Financial advisers, their clients and the public have a lot on their plate to contend with over the next few years.
“HM Treasury and the FCA need to recognise that the time is therefore not right to push ahead with their plans for creating a new secondary annuities market.
“I believe the correct course of action is to shelve these plans until advisers and their clients have had the time to digest and work through the current market uncertainty,” said Chris Hannant, Apfa’s director general.
Lack of interest
The secondary annuity market, unveiled as part of the UK’s sweeping pension freedoms, allows retirees that have already bought an income for life the chance to sell it for a cash lump sum.
The FCA’s consultation into creating the market closed on 21 June.
Hannant warned that he had concerns about the “workability” of the regulator’s proposals, revealing that the “vast majority of financial advisers I have spoken to have said they just aren’t interested”.
“There is therefore the risk of a mismatch of supply and demand, particularly given the creation of a mandatory advice requirement for those whose annuities are valued above a certain threshold,” he added.
