The FSA today published its new data reporting rules for Retail Mediation Activities Return (RMAR) forms. Here is IFAonline's breakdown of the changes you need to know.
Today's rules are part of the regulator's plans to extend the transactional data it receives via product sales data by collecting extra information from firms via the twice-yearly RMAR forms.
Following a consultation in May, here are the new reporting requirements:
-Firms will need to record the charging structures in the original proposals (per hour and percentage of investment) and also structures where charges are based on a fixed fee or a combined adviser charging structure.
-The FSA will still require firms to indicate which charging structure is typically offered for both initial and ongoing advice charges.
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Section K (Adviser charging)
-Adviser charging revenue reporting is to be based on standard UK Generally Accepted Accounting Principles (GAAP).
- All data in Section K, apart from data on adviser charging structures, should be reported on a cumulative basis - no change.
-In a change from consultation paper 11/8, firms are expected to report adviser charges on an accrual basis in the reporting period, and not actual payments received in the reporting period. The FSA said this will make reporting less time consuming.
-Initial adviser charge payments to be reported on an accrual basis in an amendment to the section. If an initial charge is not paid in full it must be recorded under row 5 of Section K as ‘Regular instalments as proportion of the total due'.
-Adviser Charging revenue should be reported inclusive of VAT levied on the retail client - in line with standard accounting principles.
-Section K amended to include the number of one-off advice services.
-If the client agrees to pay for ongoing advice, e.g. an annual review,
and there is a separate charge for ad hoc advice in addition to that service, the firm should record the additional charge under the heading of one-off advice.
Section L (Consultancy charging)
-In line with the consultation paper, minor amendments have been made to the rules so revenue reported under rows 1, 2 and 3 of the section should be split between three types of service:
Initial services - the revenue during the reporting period for services provided at the outset of the GPP, for example advice to the employer on setting up the scheme and launching it to employees.
Ongoing services - the revenue during the reporting period for ongoing services, for example, for helping the employer with the annual scheme renewal
One-off services - the revenue during the reporting period for services not
included as initial or ongoing services, for example, one-off advice to an
employer about using an existing GPP to meet auto-enrolment requirements.
Where particular GPP business includes both adviser and consultancy charges, these should be reported separately under Sections K and L respectively.
Where the employer has pre-arranged advice for his employees paid
for within overall consultancy charges, this should be reported under section L.
Where a GPP member has arranged separate individual personal advice, any adviser charge for that advice should be reported under Section K.
Section B and G
- Section amended so consultancy charges and fees can be recorded in the headline figures to avoid skewing profit and loss data.
-For firms operating within more than one type of advice - for example offering both a restricted multi-tie and a restricted-limited type of advice service - it should tick both boxes in Section G relevant to these advice description.
The regulator has amended its transitional rules for implementing data collection:
-Firms must now submit their first report for the new data requirements (Sections K and L) at their first full reporting date after the date of implementation of the new rules - i.e. the first full reporting period after 31 December 2012.
The FSA said this will avoid confusion on what data firms should report and when.
Initial and ongoing advice
FSA has amended the definitions for initial and ongoing advice in the RMAR guidance so they are more closely aligned with COBS rules:
-Adviser charges received on behalf of clients from third parties such as parents or trusts should be recorded as being from the client.
-In relation to pre-RDR business, firms should continue to report commissions within section B of the RMAR - both new commission relating to execution-only business and trail commission relating to products purchased pre-RDR.
-Section K records the number of retail clients who have agreed to pay an adviser charge for an ongoing advice service in the reporting period. It does not record charges for services which are not related to the provision of a personal recommendation.
-Firms should report all adviser charges after the RMAR data requirements come into force, irrespective of whether the adviser charge relates to advice on new business or new advice on products purchased pre-RDR.
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