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Call for guiding principles over adviser compensation

Rob Reid roundtable 480
Rob Reid: There is nothing set down in hard fact

Industry experts say there is a need for a set of guiding principles that providers and advisers should follow when dealing with requests for adviser compensation.

Money Marketing held a recent roundtable debate on adviser compensation, looking at how providers deal with invoices from advisers for time spent on dealing with client complaint cases.

Syndaxi Chartered Financial Planning managing director Robert Reid said: “The problem is when something goes wrong advisers invoice the provider, the provider says we would love to pay you this but we are not allowed to by the regulator. But when you ask them to cite the specific regulatory rule, they cannot. The point is that nothing is set down in hard fact.”

Reid said advisers need to provide evidence to support their claim and give enough detail to provide a timeline of what went wrong.

He added: “There will be more problems with this as people move to fees because clients will be more conscious of cost and time.”

Clive Waller roundtable
Clive Waller

CWC Research managing director Clive Waller argued a starting point could be for provider performance standards to be agreed mutually by the industry as a benchmark for whether compensation is justified.

Ross Anderson Aviva roundtable
Ross Anderson

But he warned that providers would need to be careful not to break competition rules. He said: “If you get different providers talking about agreeing a standard, chances are they will be in breach ofcompetition law.”

Aviva RDR implementation manager Ross Anderson said: “There may be compensation claims that are valid and payments go out as a result, but that is papering over the cracks. To stop the walls falling over, we need to understand what the problems are. If anything should be standardised, it is how companies deal with complaints in the first place.”


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