Fidelity has expressed "sympathy" for wraps following plans for a cash rebate ban - a move it says will be difficult to implement - and thinks the regulator may reconsider its position.
Earlier this month, the FSA proposed banning cash rebates paid to client cash accounts, arguing they could be used by advisers to disguise the price of advice and thereby undermine its drive to transparent charging.
The move, set out in the regulator's long-awaited consultation paper, will impact wrap platforms operating unbundled charging structures. Rebates will now have to be made in the form of units.
But Fidelity head of platform sales and DC business Julian Webb thinks such an undertaking will be complex.
"Whilst I can understand where the FSA is coming from and think the rationale makes sense, the additional unit position will be complicated to implement," he says. "We think there could be circumstances where cash rebates are still appropriate."
Webb says there is a case for the continuation of cash rebates providing they are fully disclosed. He thinks such additional transparency could provide a window of opportunity for wrap outfits hoping the regulator will rethink its proposal.
"I sympathise with the wrap point of view," he says. "It may well be the FSA will reconsider. If cash rebates are allowed, the regulator could seek additional disclosure."
FundsNetwork operates an unbundled charging model for customers with £50,000 of assets and says it is now "moving ahead" with developing the administration process needed to calculate additional units. But Webb says questions remain over its implementation.
"Where do you reinvest units if they have more than one fund and in what frequency?" he queries. "We need guidelines around which funds need rebating and we will engage with the FSA about how it should be implemented."
He adds Fidelity will continue developing an unbundled charging model for all customers, expected to roll out next year. As well as offering consumers two pricing structures, he says it will enable the platform to extend its product offering to ETFs and investment trusts.
Webb rejects the argument Fidelity has been developing an unbundled charging model in anticipation of the FSA banning fund manager rebates to supermarkets - a move which would have required an unbundled structure.
"We would have developed an unbundled model anyway - we think advisers should be given choice."
In its consultation paper, the FSA decided not to ban such fund manager rebates, arguing they help push down fund prices for consumers.
Webb says the apparent U-turn is less a tribute to the lobbying powers of the supermarkets and more a recognition of their dominance.
"Large platform providers hold a strong position and the regulator wants to ensure we continue to be successful and not disrupt the market," he says.
"It is not about lobbying powers but the FSA seeing there are dominant players in the market and wanting to engage with us."
Overall, Webb welcomes the consultation paper as "very positive", saying it provides clarity on a number of key areas.
"It has given us what we need to implement the requirements of RDR," he says. "We are very much in implementation mode now - in terms of unbundled charging and extra product choice."
However, he adds a couple of areas - capital adequacy and shareholder ownership models - require further clarity.
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