RDR: Adviser fund charges must be in line with competing products
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Advisers who recommend distributor influenced funds will not be able to adopt higher charges than those for recommending other competing products, according to the FSA.
In its Policy Statement ‘Distribution of retail investments’ the regulator says an adviser firm should face no financial incentive to recommend a DIF over another collective investment scheme or potentially substitutable product.
It says: “In requiring that adviser firms only be paid for advice and related services through adviser charges, we expect adviser firms to appreciate that they will not be able to continue to receive additional income from other sources in relation to DIFs (including remuneration currently paid, for example, to the firm for its role on the governance committee of a DIF.)
The FSA emphasises its current rules which state that a DIF can only be recommended where it is suitable for and in the best interests of the particular client.
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