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Ban may cover non-advised

The treatment of provider payments to both advised and non-advised platforms will be considered by the FSA as part of its proposal to ban the payments.

In its platform policy statement, published this week, the FSA says it is “desirable” to ban product provider payments to platforms but wants to conduct further research into the implications before setting the rules.

In November, the FSA went back on its original decision to ban payments between providers and advised platforms but it has now changed its mind again.

In a footnote to an explanation about its plans for provider payments, the FSA says: “One area that we believe merits further consideration is the difference between the treatment of rebates for advised and non-advised sales and we will look at this further.”

The regulator has made clear that advised platforms and execution-only brokers will be required to present products in an unbiased manner and disclose any commission or fees from fund managers while the FSA decides on the final rules over payments.

The paper says: “It is our view, there is no meaningful difference in the services provided by execution-only stockbrokers, equity Isa managers, and wraps and fund supermarkets.”

FSA head of investment policy Peter Smith says: “We need to be aware of the non-advised market and this is a reminder to the outside world and ourselves to continue to keep an eye on the issue.”

Hargreaves Lansdown’s share price fell by 9 per cent on Tuesday morning following public-ation of the policy statement. Chief executive Ian Gorham says: “The proposals will not affect Hargreaves Lansdown too much but we are against the proposal to disclose fees or commission between third parties because we are of the view it is commercially sensitive information.

“It seems odd that we would be required to disclose this information and we are concerned about the consequences for clients if fund managers have to disclose the deals they are giving to everybody. You could end up with a market that offers the same deal everywhere rather than one where firms compete to give the best price.”


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