Tied advisers will be required to present keyfacts menu documents which include information using new 'commission equivalent' calculations, however, gathering that data and presenting it could be complex.
Information concerning the commission equivalent calculations will still be complicated but the FSA basically argues - in Reforming Polarisation: Implementation - Feedback on CP04/3 (A menu for being open with consumers) and made text Appendix 1 COB 5.7.16 E Section 19 - the calculations used by banks and similar firms should reach roughly the same level of commission as it if recommending the product under the usual remuneration system.
This has to be done by bringing together all payments, benefits and services along with an additional allowance for profit of 15% "unless the firm can demonstrate thatanother figure (higher or lower) is more appropriate" says the FSA.
That said, previous respondents to CP04/03 voiced concerns firms would be allowed to use 'discretion' when allocating costs and benefits to diferent products.
"This discretion will be limited by the need to reconcile the costs an benefits attributed to those products with the commission payable on third party products," says the FSA.
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