Legacy commission ban: Concern over fund switches

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...