FSA cautions vertically integrated firms on charges

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The Financial Services Authority (FSA) has expressed concerns that vertically integrated firms may try to skirt around its adviser charging rules set to be introduced following the Retail Distribution Review (RDR).

Under the RDR requirements, firms will be expected to set their advice charges so they are ‘reasonably representative' of the services offered. However, with some businesses involved at both the product manufacturing and advice ends of the chain, the regulator said it is worried some may seek to subsidise advice charges with profits from elsewhere. This would allow some businesses to potentially offer 'cheaper' financial advice, giving them an unfair competitive advantage over smaller companies. In its latest RDR newsletter, the FSA said: "These firms must ensure that their adviser...

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