The Financial Services Authority (FSA) has set out proposals for removing commission bias from the group personal pension (GPP) market, alongside its proposals for enhancing the professionalism of investment advisers under the Retail Distribution Review (RDR).

The concept would see employers able to agree up-front how much investment advice will cost them, and how they will pay for it.

Peter Smith, head of retail investment policy at the FSA, told Pensions Age that the proposals follow on from two key questions asked in an FSA consultation paper in June, one of which - whether respondents believed charging should be applied to advice given for pension plans - saw two thirds of the 200 participants in favour.

On early responses to today's publication, Smith said: "I would say [we have had] a reasonably supporting response from the providers, who can see this gets them to a better place in terms of the economic business model."

He said the FSA will be revisiting the proposals in March, the time at which consultation responses must be received, and at this point the FSA will look at feedback from providers, employers and other stakeholders. The policy statement, FSA response and the final rules are expected, Smith said, in quarter three of next year, for implementation from the end of 2012. "So January 2013 is switch-on for this sort of proposal," as with most of the RDR proposals.

Smith is confident, however, that despite the launch of Personal Accounts, Solvency II and RDR in 2012, the industry will not be overwhelmed by these extra proposals: "Most of these have already been in place for quite some time, certainly Solvency II and RDR have had proposals in place for a number of years.

"There are some challenges for regulators, firms and the Government to deliver all of this, but I certainly wouldn't say that people will be overwhelmed - there is plenty of lead-time for people to make the changes that need to be made," he concluded.

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