Few changes are to be implemented from initial recommendations according to the overview section of today's Policy Statement on the menu options for advisers following depolarisation.
PS 04/27 Reforming Polarisation: Implementation reveals the FSA found “no major issues” through the consultation on CP 04/3, which proposed the menu options.
”The final policy we are implementing closely reflects the contents of CP 04/3,” the FSA writes.
Thus, the rules will require advisers to provide a menu outlining the cost of advice “when a firm’s representative first makes contact with a private customer with a view to advising on packaged products.”
The menu will also have to disclose a “market average” to provide a benchmark of what may constitute competitive levels of commission. Testing of market averages by the FSA “supports our decision to include MA information in the menu.”
Overall, some 114 responses were received to CP 04/3.
A transitional period of six months for implementing the new rules will apply, starting on 1 December.
Firms that want to take advantage of the removal of polarisation rules during the transitional period can do so, as long as they comply with the new rules, the FSA adds.
Despite improved risk appetite
FOS award limit increase
Relates to 136 million transaction reports
Ceremony will take place 13 November