The Financial Services Authority (FSA) is consulting on a change to its adviser charging rules to ensure advisory firms do not receive any kick-back payments from discretionary investment managers (DIMs) in exchange for recommending their services.
The regulator had already stated its intention to ban the payments in March 2010, but is consulting now to make sure its message is clear. According to the proposals, payments between a DFM and an adviser will not be permitted if the adviser has an ongoing relationship with the client that may involve the recommendation of retail investment products. However, if an adviser is simply introducing a client to a DIM, and from that point is no longer involved in making retail product recommendations, an 'introductory' payment from the DIM to the adviser can be made. The ban on referral ...
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