Advisers welcome FSA drawdown probe

clock

Advisers have welcomed news the FSA is writing to advice firms about drawdown to monitor trends in the light of April's new rules, as a remedy for drawdown abuse.

Commission loading As the RDR draws closer, advisers might be tempted by drawdown's higher commission potential to load up on payments, Brian Hill, partner at Hill Jones, said. Commissions for drawdown tend to be larger than those for annuities. As the product itself is more complex and requires more work, it can justify higher fees post-RDR too. Hill said the FSA is right to investigate the possibility of lucrative drawdown being sold inappropriately, as he has seen advisers lured in by this. "I have heard of clients with £30,000 being put into drawdown, when the FSA recommends ...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Investment

Mabel Insights adds DFM partner

Mabel Insights adds DFM partner

Additional Waverton data to be available on comparison site

Jen Frost
clock 12 November 2024 • 2 min read
Partner Insight: Navigating the great wealth transfer

Partner Insight: Navigating the great wealth transfer

The great wealth transfer represents opportunity and risk in equal measure for financial advisers.

Warwick Bloore Senior Specialist, Adviser Research Centre, Vanguard, Europe
clock 12 November 2024 • 6 min read
Neil Woodford makes YouTube and Instagram appearance with investment channel

Neil Woodford makes YouTube and Instagram appearance with investment channel

Woodford Views is being pushed out across social media

Eve Maddock-Jones
clock 11 November 2024 • 2 min read