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Advisers: Platform legacy ban signals end of trail


Advisers have warned firms to prepare for a ban on all trail payments following the Financial Conduct Authority’s announcement that legacy payments between fund managers and platforms will be banned from April 2016.

The regulator moved to ban all legacy payments between fund managers and platforms in its platform policy statement, published last month.

Advisers say the industry should prepare for all trail payments to be banned in the near future.

Investment Quorum chief executive Lee Robertson says: “The regulator wants everybody on customer agreed remuneration. I would not be surprised if there was a blanket ban on all trail shortly after the platform legacy ban in 2016.”

Evolve Financial Planning director Jason Witcombe says: “The FCA view seems to be that trail is not transparent enough and I would not be surprised to see a wider ban on trail.

“If I was relying on trail payments as an important source of income I would be very worried.”

Veracity Asset Transformation chief executive John Baxter says: “The only way for advisers to protect their business is to move clients onto customer agreed remuneration for an ongoing service.

“I think advisers have always expected a certain element of product providers switching off trail but this is the clearest sign yet that the regulator would look at switching off that source of revenue.”

An FCA spokeswoman says: “There are no current plans to ban other trail arrangements but all aspect will be looked at as part of the FCA’s RDR post-implementation review.”

The regulator’s review of the RDR is due to be completed at the end of 2014.


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There is one comment at the moment, we would love to hear your opinion too.

  1. Patrick Schan 9th May 2013 at 10:26 am

    “Jason Witcombe says: “The FCA view seems to be that trail is not transparent enough and I would not be surprised to see a wider ban on trail.”

    If it is the FCA’s view that trail commission is not transparent enough then that is simply wrong in many cases. A lot of IFAs are very upfront and clear about the trail commission they will receive and, as usual, it seems the good advisers will be punished along with the bad. Yet more people will be out of work I suspect.

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