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Adviser Oeics offer clarity on fund governance, says lobby group

The Investment Funds Association says distributor influenced funds give distributors clarity on how they are being managed which cannot always be said for retail funds that are bought “off the shelf.”

At the end of last year the FSA published a factsheet on distributor influenced funds, outlining points of best practice that should be considered in the growing market.

IFA chairman Andrew Perkins says the group supports the FSA’s efforts to engage with the distributor influenced funds industry and says making sure that end recommendations are appropriate and offer value for money for the client is paramount.

He says a key strength and benefit to the client of a DIF is that the distributor knows what is happening within the fund; how it is being managed and how it links into the overall advice process via their governance role.

He says: “As has been demonstrated with some of the information that has come to light lately concerning underlying investments within ‘retail’ funds, this is not something that can always be said when buying funds off the shelf.”

Perkins says proper processes should always be in place to ensure that any recommendations meet the client needs at a cost that is both explained and acceptable to the client and that any conflicts of interest should be clear from outset.

He says: “The Association fully agrees with the FSA when they say that a DIF should not been seen as a vehicle from which additional income is derived without adding additional value for the customer, and there are numerous instances where the added value is demonstrable.”

IFA deputy chairman Anthony Harding says: “It is generally agreed that this market has being growing for around 5 years and with the FSA having issued the factsheets late last year, the market now has some guidance to work with. It is important that the FSA and the Association works together with the market to make sure the ‘key concerns’ outlined in the factsheets are answered’


Workshops focus on switching

SimplyBiz and Clerical Medical are holding a series of 24 workshops throughout the UK to ensure members comply with the FSA’s pension switching requirements.

Allianz chips away at equity income

Allianz Global Investors has brought out the RCM European equity income
fund, an Oeic investing in blue chip companies in continental Europe that
pay dividends.

What exactly is product innovation?

By Fiona Tait, Pensions Specialist Ros Altmann reportedly hoped for more product innovation following pension freedom¹ and, according to one poll, 66 per cent of advisers also believe that providers should be doing more². This article considers whether there is a real client need for new products, or whether we should be focusing our attention on efficient delivery […]


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