Advisers deemed independent under the FSA's proposed regime may not be able to offer clients access ...
Advisers deemed independent under the FSA's proposed regime may not be able to offer clients access to their own fund supermarkets because they pay commission.
Currently a client can buy through a fund supermarket on an adviser's website, often a whitelablled version of Cofunds or Fidelity FundsNetwork.
Upon purchase, the adviser receives commission, and in some cases, trail commission, even though the client bought without advice.
Under depolarisation proposals an adviser using the title independent must either charge a fee or have a defined payment structure, a remuneration structure unavailable through the direct supermarket model.
Clive Boothman, chief executive at Cofunds, said clients buying online are told before purchase the transaction will result in a commission payment, which can be interpreted as conforming with FSA proposals.
Ian Taylor of Integrated Financial services, which runs the funds platform Transact, said this arrangement is opaque as some funds offer trail, while others do not.
This difference between products and remuneration, he argued, would not fall under the spirit of the FSA's proposals.
If the commission is rebated to the client the question of supermarkets should not be an insurmountable problem, the FSA said.
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