Section K is unworkable: Pitfield

The managing director of Guernsey-based adviser software provider JCS said that Section K of the RMAR, which requires firms to provide data on adviser charging revenue, payment methods, client numbers and charging structures, placed a “huge administrative workload” on advisory firms.

Proposing a complete redesign to section K, which was introduced last year as part of the retail distribution review, Mr Pitfield said his firm had not been able to obtain proper guidance from the FSA regarding the accounting and reporting of transactions.

He claimed that section K could not be correctly completed by advisers as in some cases invoices remained outstanding at the end of an investment period, with some payment methods unknown, speculative or subject to change dependent on the type of investment.

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Mr Pitfield called on the FSA to give “clear, unambiguous and binding guidance” based on these concerns, and for advisers to press his case to the regulator.

An FSA spokesman said: “Under the new rules for investment advice, advisers have to agree a charging structure with their customer and part of this process is agreeing upfront the method of payment.”