The adviser-provider relationship: Good and bad practices

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The Financial Conduct Authority (FCA) has outlined a number of good and bad practices in its consultation paper on inducements after it found "serious failings" among advisory firms in complying with the regulator's conflict of interest rule.

Bad practices 1) Payments to secure distribution Some advisory firms appeared to have received payments from life insurers in exchange of selling their products or services, the FCA found. It said there was a"positive correlation" between the level of payments made by life insurers to advisory firms and the products placed on their advice panels. The regulator also found that providers had spent increasing amounts on support services of advisory firms in the lead up to the Retail Distribution Review (RDR) and beyond, which did not necessarily enhance the quality of service for th...

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