OpinionMay 17 2013

Superclean debate rages, longstop campaign begins afresh

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As much as we would like to read a broader theme across the events of any given week, setting the daily news as chapters in an overarching narrative, some weeks the most significant stories are seemingly unconnected.

Words of warning

Aviva became the latest provider to decry so-called superclean share classes this week, when market intelligence manager James Dalby told FTAdviser that giving larger platforms better discounts would harm competition by barring the way for new entrants.

Aviva also published first-quarter results warning of rising restructuring costs which totalled £54m in three months alone.

As a result of their eye-watering redundancy programme the company warned these costs will go up in 2013 before they start coming down. Although new business levels have risen at the provider, things have been rocky for them recently and a source close to the company tells me morale is low so I wonder what effects this may bring in the next couple of months.

Question time

David Geale, head of investment policy at the Financial Conduct Authority, kindly agreed to answer reader questions for FTAdviser and his responses were published on Tuesday. Although I will admit a small pang of disappointment at his dodging of a couple of pertinent queries, he did reveal that the FCA has no plans to ban trail commission from being “passed on” by platforms following the rebate ban.

I do wish he’d answered a bit more directly when one reader asked what would happen if a client didn’t agree to a new rebate-free share class. His response - that everything needs to be done with client permission - is fine but clearly if a client is happy with their current lot they will still need to change after the rebate ban comes into effect. Remember, the ban is retroactive and not only for new business.

Similarly, I wish he’d given a more direct answer when asked why there had been no more specific timetable for the read-across. Instead, he simply repeated that the read-across would be considered rather than shedding any more light on when or where the FCA plans to act.

Don’t get me wrong, his answers are well worth a read. However I can’t blame readers for being frustrated with the regulator’s closed, reticent stance when transparency and specificity are so frequently vaunted in the new regulatory environment.


Skirmishes continued in several isolated places on the battlefield, with the Association of Professional Financial Advisers saying they will renew their longstanding fight for an adviser long-stop.