This week, Cofunds, Novia and Ascentric said they would support advisers who want to ‘bundle’ platform costs with the adviser charge, following the Financial Conduct Authority’s move to allow such plans in last month’s policy statement on payments to platforms.
This groundswell of nascent support comes following a warm welcome for the proposals last week from trade bodies such as IFA Centre and the Association of Professional Financial Advisers, which said the FCA’s move was “common sense”.
It seemed an odd move for a regulator that has made transparency at seemingly any cost a priority, but it should help to simplify charges to some degree and, some have argued, put power back in the hands of advisers.
Rebate ban fallout
In other platform paper news, fee-based discretionary managers have given support to plans for a ban on kick-backs from fund managers, after the UK’s financial regulators continued their war on rebates in their recent platform policy paper.
The recent platform paper extended the FSA’s ban on financial advisers receiving rebated ‘commission’ payments from fund managers, which came into force at the end of 2012, to platforms.
Consultations will be launched on extending the principle to industries such as discretionary management and self-invested pensions. DFMs for one might as well support it, I supposed, as it seems inevitable the ban will be read across.
Separately, Parmenion called on advisers to adopt centralised investment propositions to help counter the likely reduction in adviser profitability the platform rebate ban will have due to the pressure it will place on traditional trail income revenue streams.
This is likely to be an ongoing theme, and seems to show that those advisers that rely on commissions and rebates for income will struggle in the post-RDR world. For these advisers, the next two years will see them having to substantially alter their models.
Fighting back on liberation
This week also saw pension providers begin to hit back hard at suspected pension liberation firms to protect unwitting consumers being thrust into potential poverty in retirement, with Legal and General working on a legal interpretation of pension transfer rules to help combat such schemes.
This is part of a broader offensive. Spokesmen for Legal & General, Aegon UK and Suffolk Life have stated they are taking action including blunt refusals and direct customer contact, to protect people against being stung by the huge tax penalties and stinging charges of ‘unlocking’ their pension.
