Regulator probing volume override deal
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The FSA says it is looking into a potential breach of its incentives rules by a firm.
In its discussion paper, Platforms: Delivering the RDR, the FSA says that there is a risk that platforms will compete for business from adviser firms by offering incentives which do not comply with the inducement rule.
It says: “Our thematic work on platform use identified a firm which had entered into a volume override arrangement. We are currently looking into this as a potential breach of our inducements rule.”
According to FSA head of investment policy Peter Smith, “volume override” arrangements are where extra commission is paid out by a provider when a distributor passes a target threshold of sales for a given product.
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