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Autif rebate research could aid IFAs in Sandler defence

Autif is to research the extent to which IFAs rebate commission in its response to the Sandler review, a move which could help IFAs defend themselves against accusations of commission bias.

Autif chairman Alan Burton says the trade body is approaching product pro-viders to compile comprehensive evidence on the number of IFAs which discount some or all of their front-end commission.

The move follows the suggestion, in Sandler&#39s consultation paper, that there may be a need for regulatory intervention on fees and commission due to the complexities and lack of disclosure under the current regime.

However, Burton believes Sandler is unaware of the extent to which IFAs discount their front-end commission and believes that only a small minority of funds sold through intermediaries leave the consumer paying the standard initial charge of between 5 and 6 per cent.

If successful, Autif will be the first to compile ext-ensive data on discounting. The figures&#39 commercially sensitive nature has meant providers have been unwil-ling to make levels of discounting public in the past. But Autif now hopes to extract the information while maintaining provider confidentiality.

Burton says: “We are keen to supply empirical evidence rather than anecdotal evidence to Sandler. The level of discounting that goes on by IFAs is not appreciated.”

Hargreaves Lansdown investment manager Ben Yearsley says: “I am not sure how many IFAs give up their commission on Isas and unit trusts but there is quite a lot of discounting on more expensive products such as with-profits bonds.”

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