Legacy commission ban: Concern over fund switches

clock

Banning trail commission on fund switches - as the FSA hinted it may do - goes against the spirit of treating customers fairly, advisers say.

In its original November consultation, the regulator set out its long-held intention to allow trail commission on existing contracts to continue to be paid after 2012. But it is likely to ban legacy commission, which it defined as an “additional payment” to advisers based on a contract set up pre-RDR but as a result of a change made post-RDR. It had been assumed that fund switches would not come under the ‘legacy’ definition because the switch is not an “event” involving new money and would not, therefore, qualify as an “additional payment” to an adviser. But the FSA’s paper referr...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Regulation

FCA: Simplified advice rules update imminent; MPS review outcome set for 2027

FCA: Simplified advice rules update imminent; MPS review outcome set for 2027

Regulator's Kate Tuckley gives update

Isabel Baxter
clock 08 September 2026 • 3 min read
DB transfer adviser hit with provisional FCA ban and £742,700 fine

DB transfer adviser hit with provisional FCA ban and £742,700 fine

Daniel Thomas advised 53 clients, including four British Steel scheme members

Sophia Panayi
clock 03 September 2026 • 2 min read
Proving good customer outcomes still a challenge for financial planners

Proving good customer outcomes still a challenge for financial planners

Firms face practical challenges in Consumer Duty board reporting

Sophia Panayi
clock 03 September 2026 • 2 min read