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 ...
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