“We have decided not to propose changes that would require product charges and platform charges to be separated,” the FSA said in its consultation paper on platforms.
The regulator did, however, add that platforms must provide full disclosure of the payments they receive from fund managers and must also offer the option of an unbundled charging structure.
The FSA also announced it is planning to ban cash rebates to retail investors as part of its reforms, instead requiring any rebates to be paid in units.
Product providers who made payments that advisers could use to hide the extent of the charge paid by the customer would “totally undermine what we have set out to achieve for consumers by removing commission bias and could leave product charges at an artificially high level”, the FSA said.
The two other main proposals contained in the consultation paper were to ensure platforms allow customers to transfer investments elsewhere without having to cash them in beforehand, and to ensure that customers who invest in funds through platforms retain voting rights and are kept adequately informed about such funds by their fund managers.
The next significant date in the RDR calendar is 25 November, when a parliamentary debate on the subject will be held in the House of Commons.
The prominence likely given to such a discussion, coupled with the latest paper’s demonstration that the FSA is willing to modify its stance on certain issues, raises the prospect of further concessions.
The main bones of contention within the industry remain the need for IFAs to improve qualifications and a December 2012 implementation date that increasingly appears to be coming too soon for the majority of the industry.
