Cofunds chief executive Martin Davis says the FSA will “inevitably” extend the platform rebate ban to life wrappers as the current proposals would create an uneven playing field.
In its platform policy statement, published in August, the regulator said it is “desirable” to ban payments between product providers and platforms but has delayed its final rules while it carries out further research.
Davis says: “Rebates are still allowed to go back to a life company and that will skew the market to opaque, insurance-type funds which are unclear and nobody knows if they are suitable for clients. The FSA inevitably will step in and change that and it will be a game-changer.”
Speaking at the FSA’s Asset Management Conference in London this week, FSA director of conduct policy Sheila Nicoll said the regulator is aware of an unlevel playing field between platforms and life companies with regard to rebates.
She said: “There are issues over tilting the famous level playing field again between funds and life products. We are dealing with very complex issues and it is important we understand fully the implications of any changes we might propose.”
Standard Life head of pensions policy John Lawson says: “The FSA has yet to say anything in writing about moving in this direction, which would be a very sharp change. Life products and platforms are two very different things and to try and compare them is pointless.”