Split over outlook for Difs after the RDR
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Skandia UK chief development officer Peter Mann has warned it is difficult to see how distrib-utor-influenced funds will be able to operate following the retail distribution review.
Mann says Difs are at odds with the RDR drive to separate distributor from manufacturer.
He says: “The fact that they are distributor-influenced clearly has some kind of connotations in a post-RDR environment where the delineation between the distributor and the manufacturer has to be complete and a degree of influence cannot be exercised.
“It is hard to see how they fit with the RDR. I would be interested to see how they can operate in a post-RDR environment when a clear emphasis of adviser-charging is to segment the manufacturer from the distributor.”
But DV Consult consultant Piers Denne says: “After the RDR, there does not have to be a clear distinction between manufacturer and distributor for products. There does have to be a situation where the income paid to the adviser has to be agreed in advance with the client and then either paid for by cheque or on a matched basis. Difs allow this in a more straightforward manner as the adviser is in control of the pricing mechanisms.”
Readers' comments (3)
john | 5 Feb 2010 11:30 am
peter talks absolute sense here. Lets see more leadership like this rather than the broker fund punting leadership we have seen
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Mister Maker | 5 Feb 2010 2:21 pm
So the RDR is designed to reduce manufacturer/distributor blending? I suppose that is one interpretation but probably one from a company that can only operate on one-side of that fence.
Otherwise I guess SJP, Standard and Hargreaves to name but a few should be quaking in their boots! Not something I see happening nor so I see factored into their announcements to the listed markets that they sit on (all three seeing RDR as a positive for their respective business mdoels).
The only thing that RDR does in respect of DIFS is mandate that firms must disclose income they receive - it doesn't say it can come from only one source. As long as the IFA discloses all the income they will receive , and I hope most are doing this anyway, there is no problem with DIFS.
Let's be honest - why would Skandia promote funds they didn't receive ridiculous rebates on or, more importantly viz Spektrum, own themselves. We all know asset ownership drives valuation so why champion something that reduces your ability to do increase your value.
Not leadership - myopic desperation.
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Anonymous | 5 Feb 2010 8:38 pm
What a turn around by Skandia? They've only very recently sold their own IFA distribution, Bankhall, so were all their products DIFs in the past?
Many providers have ownership in significant adviser companies (AXA, Standard Life, Friends Provident, Aegon, Zurich etc.) so it is ok when the boot is on the other foot!
N
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