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&#39White label ban will hit small fund firms&#39

Product providers will not be allowed to sell other products branded as its own as white labelling is to be banned by the FSA in its depolarisation proposals.

In its place, the regulator has opted for a system which it is calling co-branding, where the distributing provider must tell consumers who has manufactured the product that they are buying.

The move has been criticised by fund managers, who believe it will prevent smaller specialist managers capitalising on the distribution opportunities offered by high-street players.

They say big distributors will be unlikely to import products from a provider without a recognisable brand name, leaving smaller providers out in the cold.

But others say it presents a marketing opportunity to high-street players, who will be able to use the specialisation of providers they import to their advantage.

The consultation paper says: “We do not propose to permit white labelling for packaged products to the extent that it would conceal or significantly downplay the identity of the manufacturer.”

Schroders European sales and marketing director Robert Higginbotham says: “If we ban white labelling, it is going to kill some of the banks expanding their relationships with smaller fund managers.”

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