The Financial Conduct Authority (FCA) yesterday published the findings of a review into potential inducements between providers and advisers - but there are a few things the paper failed to mention, according to Threesixty.
Threesixty managing director Phil Young (pictured) said the FCA had done a good job uncovering some of the things that went on "under the radar" but had failed to grasp the entire spectrum.
He said: "The more the FCA is closing in on some of these things the more things go under the counter a little bit, so people are just burying things a little bit deeper.
"The paper the FCA did was very good because it actually got to the heart of quite a lot of the things. But they'll probably have to get an inside view from somebody on it along the line."
Young said the FCA failed to tackle some issues that had "been around for a while", such as enhanced premiums in protection deals.
It also did not pick up on new inventions, such as guaranteed buyouts from platform providers, he said. There was "enough evidence out there" for both of these practices, he added.
He explained: "On protection contracts, [sometimes providers] increase the premium that's charged clients for a life assurance contract, in return for adding extra commission on for the adviser."
"[Also] there are advisers out there that put assets on certain platforms, on the basis that there is actually a buyout at the back end of it. They're trying to tweak the contracts to avoid it looking that obvious. But it's a new form of commission basically."
The FCA focused its review on investigating firms' practices around IT development and maintenance, training, conferences and seminars, hospitality, promotional activity, meetings with advisory firms, and management information, data and research services.
It found that some advisory firms appeared to be receiving payments from providers to sell products, or were selling particular products in their own commercial interests.
It alleged that providers had spent increasing amounts on support services of advisory firms, such as IT systems, which did little to enhance the quality of service for the customers.
It also identified joint venture models that were designed to channel monies to advisory firms to secure distribution.
The FCA specified in its paper that it did not allow payments or benefits that "impair the firm's duty to act in the best interests of its client; are not designed to enhance the quality of service provided to a client; and are not clearly disclosed to clients".
However, it allowed benefits that are "reasonable and proportionate; of a limited scale and nature; did not need to be relied on by the advisory firm in the future to continue to service its customers; and could reasonably not be expected to result in the channelling of business from the advisory firm to the provider".
The regulator is inviting responses to its consultation before close of business on 18 October.
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