IFAonline picks out ten key points from the Financial Services Authority's (FSA's) latest consultation paper on platform rebates...
As many (though not all) had expected, the paper confirmed the FSA's intention to ban both payments from providers to platforms and cash rebates to consumers.
To allow either, it said, would compromise the objectives of the retail distribution review (RDR), particularly around transparency.
But, as this paper was published alongside a large piece of consumer research, there were one or two (we found ten) things of note. Here they are...
Ten key proposals from the FSA's latest paper on platform rebates
1 Fund manager rebates
Payments from fund managers to platforms should be banned. The FSA said in its consultation paper: "To ensure the consumer is clear on the cost of the platform, we believe the consumer should pay an explicit fee for the platform service, and payments from product providers to platforms should be banned."
2 Cash rebates
Cash rebates should be banned. The FSA said that, in its view, cash rebates "hinder transparency and potentially provide a mechanism for commission to continue being paid." But, interestingly, unit rebates would be allowed. From the paper: "[Our proposed approach] would not prevent rebates being made through additional investment into the product."
Execution-only platforms have not escaped the FSA's proposals, with plans to read across the rules impacting adviser platforms to direct to consumer propositions. The move will impact the likes of Hargreaves Lansdown. The FSA said: "Improved transparency in this market would help consumers compare the services of different platforms and form a view on whether different products available are value for money."
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