Aifa has welcomed the FSA’s moves to improve the quality of data for this year’s payment menu market averages but warns it is virtually impossible to deliver an accurate commission rate for initial advice on collective investments.
The FSA has released the updated market average figures for the payment menu, which reveal an almost 10 per cent increase in the market average commission paid on collective investments.
The new averages, which can be used immediately and must be implemented by January 1, 2007, put single collective investment commission at 3.94 per cent compared with 3.59 per cent in November 2005.
This follows the Office of Fair Trading’s August upholding of Aifa’s complaint that the averages discriminated against IFAs by making them look more expensive. The OFT ordered the FSA to change its questionnaire and introduce new checks to ensure that non-advised sales, which distorted past figures, are not included.
Aifa deputy director gen-eral Fay Goddard says the new figures are more realistic but warns that it is impossible to deliver an accurate rate for initial advice on collectives due to the multiple ways in which commission is paid.
Goddard say: “The FSA has made considerable effort to change its data collecting processes since the OFT verdict and there is little more it can do. But we retain the view that it is virtually impossible to deliver an accurate rate for initial advice on collectives due to the complexities in this area.”