Tisa launches distributor funds review
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The Tax Incentivised Savings Association has commissioned an independent review into distributor influenced funds.
Tisa’s executive committee has agreed to commission a review to investigate how distributor influenced funds are being used in practice, what is needed to deliver best outcomes and what best practice would look like.
The firm is to appoint an external agency to conduct the review with a report to be filed by the end of May. The executive committee is to fund the review.
The FSA has already highlighted concerns around distributor influenced funds, such as conflicts of interest and the complexity of level of charges. According to the FSA’s retail conduct risk outlook 2011, there are at least 40 firms offering these funds and around 10,000 customers with assets invested. Difs have around £2bn of assets under management in total.
Tisa director of policy Malcolm Small says: “The FSA has made it clear that it is monitoring this market and that it may need to intervene unless standards improve.
“Many advisers are looking to change their business model in response to the RDR and this is likely to lead to an increased use of distributor funds. It’s therefore vital that we identify the standards that all participants need to meet in order for these funds to achieve their potential to produce good consumer outcomes.”
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