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AITC attacks discount &#39madness&#39

AITC director general Daniel Godfrey has attacked discount broking as “madness” as part of the association&#39s response to the Sandler review.

Godfrey is questioning whether the framework which allows IFAs to sell funds on an execution-only basis and rebate commission is fair.

He points out that consumers cannot get the same prices by going direct to the provider.

He says: “It is madness. Just for being an IFA, but not giving advice, means you can sell at a big discount.”

The AITC response to the Sandler review is recommending that product providers which sell products direct to the public should be obliged to sell them at the same price they provide them to intermediaries, net of all initial and renewal commission.

Torquil Clark managing director Don Clark says: “Discount brokers account for about 40 per cent of the Oeics and unit trusts sold. Godfrey&#39s proposals would put investment trusts on an even footing but at the expense of fewer investment products overall being sold because they do not offer commission. If you took away the commission, discount brokers would cease to trade.

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