The FSA has released its proposals on menu documents outlining the charging structures and information on fees and commissions intermediaries will have to provide consumers with in future.
Annex 5 of the Feedback Statement on CP 166, published alongside Consultation Paper 04/3 - Reforming Polarisation: A menu for being open with consumers provides what the FSA calls "Examples of the menu documents".
These suggest limits on fees that advisers would charge per hour, alternatively outline how advisers should present rates of commission on lump sum and ongoing premiums for different types of products.
Each suggested document consists of five main points;
Presentation of fees is proposed as a straightforward listing of costs per hour, such as between £100 to £150 per hour for a financial adviser, and between £150 to £200 per hour for a principal, director or partner.
Presentation of commission rates is more complex, including comparisons between the maximum charged by the business versus the "market average" rates of commission for any particular type of product.
Just one of the example commission levels from the FSA document suggests where a consumer considering the purchase of a collective investment, the advisers might charge a maximum 3% commission against a market average of 1.67%, while a third column shows just how much this cost would translate to in pounds and pence over a year on, say, £100 invested per month.
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