RDR interim report: Banning IFA commission not 'practicable' but cap considered

The regulator says it is not seeking to end the role for product providers in organising payments to advisers from customers’ accounts or investments. It does not intend to end the practice of ‘factoring’, or a traditional front-end commission arrangement, as long as the product provider has played no part in determining how much remuneration will be paid. However, it does question whether it should impose regulatory limitations on the amounts paid, as some respondents to its RDR discussion paper have suggested. “Outright caps on commission rates or fixed tariffs would clearly create co...