Offshore commission ban could cut choice
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Martin Currie head of product development Toby Hogbin believes that implementing the retail distribution review could result in a reduction of offshore funds being distributed in the UK.
Hogbin says the RDR will make the distribution of offshore funds difficult as it will be impossible for advisers to receive commission and most offshore funds have a retail share class which includes commission.
He says: “While the UK is leading a charge away from commission, it is commonplace in continental Europe, so it could become more challenging for UK distributors to promote offshore products unless they offer a wholesale share class.
“I am not sure how prepared these offshore firms are to offer a UK share class for advisers to promote. It could see choice curtailed as providers may not choose to create products des-igned purely for the UK market. I do not believe offshore providers understand that they are facing this decision.”
Skerritt Consultants head of investments Andrew Merricks says: “If groups are well known and individual funds are successful, I expect they will look to offer a share class suitable to UK advisers. Niche products may be the ones that suffer.”
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Readers' comments (1)
Martyn Sinclair | 2 Jul 2010 9:49 am
very sadly, all RDR is doing is moving the advisors offshore where they can continue to sell and earn even higher commissions than they could by working onshore. I am a strong advocate of regulation and compliance, but it is a sad indictment of our times that the onshore market has tied itself up in so many knots that the clients are now suffering in terms a total lack of understanding in the sales and marketing process. All i see happening is that advisors are moving offshore,clients are being advised offshore, commissions going up, clients and their funds no longer being protected. Very soon, the regualtion and compliance will be a white elephant becasue eventually there will be no one left for the suits to regulate.
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