While it has moved to ban cash rebates from platforms, the Financial Conduct Authority will continue to allow cash rebates of £1 or less in addition to unit rebates for clients, under its new rules for platforms.
The ban on cash rebates will not prevent a platform from receiving a rebate from a fund manager in cash, provided this is passed on in full to the consumer in additional units, as the FCA said this would be unlikely to offset any adviser or platform charges.
The exception will apply to both advised and non-advised platforms.
Earlier this year FTAdviser reported that the regulator was considering allowing de minimis rebates following lobbying by the platform industry and the Tax Incentivised Savings Association.
However, at the time some commentators said the exception would be more trouble than it was worth and could create confusion for consumers. Criticism came from several platform providers, including Novia’s Bill Vasillieff who had previously argued for a blanket ban on rebates.
Peter Mann, UK managing director of Skandia, said at the time the concession was “pragmatic”, while Cofunds’ Verona Smith said that allowance of small rebates would be useful but would need to be around five times higher than that being introduced.
