Legacy commission ban: Concern over fund switches

clock

Banning trail commission on fund switches - as the FSA hinted it may do - goes against the spirit of treating customers fairly, advisers say.

In its original November consultation, the regulator set out its long-held intention to allow trail commission on existing contracts to continue to be paid after 2012. But it is likely to ban legacy commission, which it defined as an “additional payment” to advisers based on a contract set up pre-RDR but as a result of a change made post-RDR. It had been assumed that fund switches would not come under the ‘legacy’ definition because the switch is not an “event” involving new money and would not, therefore, qualify as an “additional payment” to an adviser. But the FSA’s paper referr...

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 Regulation

FCA's vulnerability findings flag lack of tailored training and understanding

FCA's vulnerability findings flag lack of tailored training and understanding

Many firms had taken positive action but ‘areas for improvement remain’

Isabel Baxter
clock 07 March 2025 • 6 min read
FCA urges principal firms to check PII cover

FCA urges principal firms to check PII cover

Regulator finds 10% of sampled firms may not have adequate cover in place

Isabel Baxter
clock 28 February 2025 • 1 min read
FCA to undertake MPS Consumer Duty review

FCA to undertake MPS Consumer Duty review

Regulator recognises the sector has been ‘growing at pace’

Isabel Baxter
clock 26 February 2025 • 2 min read