RDR unlikely to increase direct retail ETF use says Feifa head

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The Retail Distribution Review (RDR) will not change independent financial advisers'(IFAs) reluctance to use ETFs because they do not fully understand how they work, says the head of an industry body for advisers.

"I think there are two issues for most IFAs with using ETFs. The first one is that most IFAs work on a commission basis and ETFs are not structured to pay commission to advisers," says Paul Stanfield chief executive of the Federation of European Independent Financial Advisers (FEIFA). "Secondly there is far greater complexity to ETFs -particularly synthetic ETFs - than perhaps was originally realised. I think a lot of IFAs have realised that and I'm not sure how comfortable they are with the true workings of the structure." With the RDR due to be implemented from the start of 2013, ad...

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