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FCA urged to ban cash rebates to Sipps

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The FCA is under pressure to push through proposals to apply the ban on platform fund rebates to life companies and Sipps.

Last week, the regulator published a policy statement setting out plans to ban cash rebates and fund manager payments to platforms on new business from April 2014. In addition, legacy payments on past business will be banned by 2016.

The FCA is said it is considering whether to extend the rules to cover Sipp providers and life companies.

A J Bell marketing director Billy Mackay says: “We think the FCA are dragging their heels on applying the ban on rebates to adjacent markets.

“The FCA have said it is complex to apply the rules to Sipps and life companies but it is not obvious why that is.” 

James Hay chief executive Alastair Conway says: “While this [consulting on bringing Sipps and life companies under the platform rebate rules] is only right and proper, it needs to be completed as quickly as possible to end further uncertainty.

“We have failed to see why these providers have been treated differently to date and would urge the FCA to make this consultation rapid to enable a level playing field across the wider platform market.”

Hargreaves Lansdown says it plans to apply the FCA’s revised rules on cash rebates for platforms to its Sipp business.

Hargreaves Lansdown head of advice Danny Cox says: “I do not understand why the rules do not apply to things like Sipps.

“It makes sense from a client perspective to apply the same pricing across the whole platform, otherwise you end up treating one product differently to another which could be confusing for the customer.”

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