Bonds and collectives: beware charging drag

When the Financial Services Authority (FSA) announced the Retail Distribution Review (RDR) back in 2009, it took some time for the implications to be fully understood and the profession then began to appreciate the impact of adviser charges. The rule to remember is that any money taken from a policy to provide a payment to an adviser must be the client’s money. It cannot be a product charge. Let us consider bonds and collectives and consider how an adviser charge deduction can affect them for initial and ongoing deductions. Investment bonds An initial adviser charge can be paid d...