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Aviva calls on FSA to drop provider responsibility for adviser charging

Aviva is calling on the FSA to drop proposals to make providers responsible for monitoring the suitability of individual IFA charges under the RDR.

The RDR consultation paper states that the FSA will require providers to validate and monitor adviser charges. It says providers must take account of the impact that adviser charges could have on the performance of products and how this will affect outcomes for consumers.

In its response Aviva says it supports the concept of adviser charging but not the requirement for providers to monitor the level of charges.

It says: “This contradicts the aim of adviser charging of breaking the relationship between provider and advisers regarding payment. Providers are not best placed to police this and it instead should be monitored by the FSA.”
 
Aviva is also calling for the regulator to drop the ban on provider factoring for regular premium products, saying it should be maintained and subject to standard discount rates across providers.

Aviva says it supports the introduction of QCF Level four as the minimum qualification for advisers and the 2012 transition deadline.
 
Aviva marketing director David Barral says: “Aviva recognises that access to good financial advice is crucial to the financial wellbeing of millions of people. Consumer access to financial products and services is the biggest and most pressing issue facing our industry and it is crucial that the FSA delivers on its objective of ensuring that advice is easily accessible.”

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. If the providers had been more careful with ‘incentives’ and their dodgy products in the past would we be having this tediously protracted debate?

  2. Evan: No more so than if advisers had not promoted and distributed them.

  3. Chris: True, however you are tarring all advisers with your wide brush, the FSA recognises the provider influence in product distribution via ‘incentives’ and you only have to look at Scottish Life for instance to see why ‘pensions unlocking’ was so lucrative for the greedy element of advisers, as was ‘sterile pensions’ churning for Standard life and BIA. Funny how many had Berkeley in their names? I could go on and on about the uncomfortable fact that greedy advisers have been easily lured by any ‘concept’ dreamed up by the marketing teams at the life offices, I have been in one when they were pushing FSAVCs.

    Now we see ‘wraps’ and ‘platforms’ luring the moths to the light.

    The FSA needs to dig deeper if the RDR is ever going to achieve whatever is intended.

  4. Nicole, I think you missed something I read somewhere else about what AVIVA said about advsier charging. it was to do with this bit

    AVIVA: “This contradicts the aim of adviser charging of breaking the relationship between provider and advisers regarding payment. Providers are not best placed to police this and it instead should be monitored by the FSA.”

    Monitoring does not mean or suggest AVIVA shoudl take action, but they SHOULD collate details of high charging and pass it to the FSA so that the FSA can consider whether it is a trend which requires further investigation. The implication i read elsewhere is that AVIVA (renowned for paying over the top commission to gain market share and with a close relationship to some banks) don’t think they should be giving the raw data to the FSA for them to consider. Could that be because if they DID it would show that the trend for high up frnt charges is nearly all from banks?

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