The FSA has ruled out allowing provider factoring on group personal pensions (GPP) advice despite admitting concerns over up-front costs.
It says if it did allow factoring, it would run the risk of "regulatory arbitrage" via firms using GPP contracts in place of individual ones, where factoring has been banned under adviser charging. In its final RDR rules on corporate pensions, published today, the FSA says a number of stakeholders called for it to allow factoring of consultancy charges - the name given to adviser charging in the GPP arena - in a bid to spread out up-front costs and provide income to advisers in the short term. The FSA itself provides an example of the potential size of up-front costs on a GPP contract...
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