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Home > Regulation > UK Regulation

FSA: Offering execution-only is not a rules exemption

Watchdog issues warning that cash rebate and adviser charging rules still apply for advisers offering execution-only services.

By Nick Reeve | Published Oct 02, 2012 | comments

The FSA has warned advisers offering execution-only transaction services that they remain subject to the same rules regarding cash rebates and adviser charging.

Last week Investment Adviser published CoreData research which showed the number of advisers offering execution-only services in this way was expected to triple in the next two years.

A spokesperson for the FSA said the regulator was “aware” of the increasing number of advisers contemplating this route, but “would want to be sure of the nature of the system that no advice has been given”.

“Platforms which are white-labelled by advisers are still subject to the same RDR proposals banning cash rebates,” the spokesperson said.

The FSA also raised concerns about direct-to-consumer propositions that use ‘screening’ to select funds based on an attitude to risk questionairre, saying it would be difficult for such services to qualify as “non-advised”.

Under proposals currently being considered by the FSA, both adviser-facing and direct to consumer platforms would be banned from accepting kickbacks from product providers from January 1 2014. They would also be banned from paying rebates to consumers, except in the form of fund units.

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