He said SBG is fully supportive of AIFA in "strongly opposing" the proposal to increase the threshold for the Investment Intermediation class to £150m.
Martin said the RDR will have a significant effect on IFA businesses’ revenues and that the proposed changes to FSCS funding will have a major impact on the stability and long term future of many firms.
Research by Deloitte showed that 70% of firms expect turnover and profitability to decrease as a result of RDR, and Martin warned the Financial Services Authority had "largely disregarded" this factor.
He also pointed to reseach suggesting although IFAs currently account for 70% of all financial transactions in the UK, Ernst & Young forecasts a substantial drop in adviser numbers to just 20,000 by the end of 2013.
Martin said: "The FSA’s argument that the profitability criteria is a relevant measure is flawed and disproportionate to the profitability generated from this sector, compared with that of other sectors.
"The figures on which the FSA’s calculations have been based are out of date and do not take sufficient account of the significant fall that has taken place in recent years in both the number of advisers and level of transactions."
Sesame Bankhall Group also said is it opposed to the proposal to remove the cross subsidy from PRA product providers to intermediaries, as like AIFA it believes product providers should bear some responsibility for the sale of their products.
Martin said: "Our view is that the fairest approach in terms of funding the FSCS would be to link a levy to sales via a product levy. This would be appropriate, both from a fairness perspective and for ease of administration.
"This is not currently proposed and the FSA has argued that this would not result in intermediaries funding the contribution. Whilst this would appear to be correct in the short term, in the longer term any FSCS levy will need to be funded by consumers, as this is the only income source that intermediaries have.
"The product levy approach would also have the advantage of being transparent and capable of being linked to risk. The product levy also reduces the risk of retrospective charges, providing it is set at the right level."
Martin said the proposals failed to address other material issues that exist with the current structure along with the current economic climate such as the ongoing risk of levies being linked to incorrect classes or that the FSA has not given any consideration to pre-funding.
And he added: "As such, we strongly urge the FSA to reconsider its FSCS Funding Model Review.”
