Portfolio Adviser understands the paper will tackle two key areas of the FSA’s Retail Distribution Review that are still unresolved: what providers can or cannot rebate from their annual management charges to platforms or as fees to advisers.
The clarification on rebates will be welcomed but will only refer to new business. The definition of what actually constitutes new versus legacy business is being pushed back further and is expected to be tackled separately.
How the regulator defines legacy business is seen as a vital aspect of RDR. Lack of clarification in this matter has drawn much criticism as providers say they are unable to fully prepare for RDR without knowing what will be considered new or legacy. Likewise, ongoing IFA trail commission and how it is paid is impacted by this definition and hinges on the FSA’s decision in this matter.
The FSA refuses to say anything on its much anticipated rebates paper other than it will be disclosed sometime this quarter. It will not be drawn on a specific date.
