Although its RDR platform policy paper covered areas like facilitating adviser charging and re-registration of funds, it delayed any decision on cash rebates and made no mention of legacy business. What constitutes legacy business impacts all of these areas.
The issue is seen as vital as it impacts how and when trail commission will apply post RDR. For example, questions have been asked as to whether or not fund switches will fall under the definition of legacy or new business.
The delay of a decision on cash rebates also makes the situation murky for providers trying to plan for RDR. The FSA has indicated there may be transitional arrangements involved.
While it remains up in the air, the FSA has said any bans on cash rebates, to either advisers or platforms, will now not be in force until after 31 December 2012.
Ed Dymott, head of commercial at Fidelity International, says with cash rebates allowed in the interim, there is little incentive for providers to keep launching new, lower cost share classes. Dymott says until the FSA give a clear indication of its plans, there is no longer any immediate incentive for companies to keep up this trend.
“All of this added consultation and debate means less time focused on the end consumer. It’s been over two years and we’re still discussing these same points and yet all we have is yet more dithering.”
