The FSA has outlined its new adviser-charging rules which allow trail commission to be switched if a client moves adviser firm after 2012.
Advisers choosing to re-register commission after 2012 will have to tell customers when they apply for re-registration and reveal the amount of commission being transferred.
They will also have to provide an ongoing service in exchange for getting the trail commission, regardless of whether the original contract allowed for this.
The details come in the FSA’s quarterly consultation paper, published last week, which invites feedback on changes to the FSA handbook.
In March, the FSA published its final RDR rules on adviser-charging but these did not cover what would happen to trail commission in 2013 where a client moves to a new adviser.
The FSA says: “Following discussions with the industry and consumer bodies, we propose to add a new rule saying that re-registration can continue where permitted by the contract between the provider and the previous adviser and subject to the terms of that contract. There is no intention to compel new advisers to re-register trail commission if they prefer not to do so.”
The FSA has also confirmed that trail commission on legacy business, in place before the end of 2012, will continue to be paid.
Aifa director of policy Andrew Strange says: “Aifa has been working hard with the FSA to secure the right for consumers to transfer their existing
arrangements after 2012.
“This is a positive move and we are pleased that the FSA has made appropriate changes to the handbook.”