FSA investigates advice standards in model portfolios, Difs and DFMs
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The FSA is investigating the quality of investment advice involving model portfolios, discretionary fund managers and distributor influenced funds.
The regulator is carrying out supervisory work into advice received as part of what it is calling ‘centralised investment propositions’.
Speaking at a Personal Finance Society RDR seminar in London yesterday FSA head of investment intermediaries Linda Woodall said: “We are undertaking a targeted piece of work on centralised investment propositions to understand current practices in this area.
“Centralised investment propositions are those where a firm operates a standard approach to advising on investments using portfolio advice services, usually involving model portfolios, referring clients to discretionary managers, and DIFs. We want to know whether clients are receiving the associated advice to a standard that meets current requirements but also with a view to the position post-RDR.”
Woodall added the FSA is also examining the quality of advice when clients are recommended to invest into single premium investment and pension products.
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Readers' comments (2)
Michael Both | 14 Oct 2011 1:55 pm
So if we don't standardise the advice given we are in the wrong but we are wrong to use templates to ensure standardisation.
Well thanks for clearing that one up, Hector! The public will now be able to sleep much safer under their beds in the fall-out shelter.
Lucky you have so much time on your hands after preventing the collapse of the banking industry thanks to your excellent oversight.
Remind me again, what are "cost-benefit analysis", "due care and attention" and "proportionality" and do they apply to senior regulators?
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Anonymous | 14 Oct 2011 2:06 pm
“We are undertaking a targeted piece of work on centralised investment propositions to understand current practices in this area"
That is because we do not have a clue as to how they work. We will be none the wiser after we have had a robust look at them but, in the round, if they are found to work well,lessons will have been learned and we will soon sort that out, going forward.
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