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FSA answers advisers’ latest RDR FAQs

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The FSA has sought to answer some of advisers’ most commonly asked questions on the RDR on issues such as discretionary fund management and adviser charging facilitation.

In its latest RDR FAQs factsheet, published last week, the regulator outlined some of the topics that came up most often at recent FSA events.

Firms were keen to establish whether they could refer clients to their in-house discretionary arm and remain independent.

The FSA says independent and restricted rules apply to personal recommendations on retail investments, and recommendations of DFM services do not fall into this category. But independent and restricted rules would apply if the firm is explicitly or implicitly recommending particular funds from a DFM.

Another topic that came up was how the regulator plans to tackle providers that do not have RDR systems in place. The FSA says it is up to providers whether to offer adviser charging facilitation services or not, or to limit this to certain products.

The FSA has also made clearn that firms offering a holistic service to clients are required to disclose any commission they receive for protection business.

Aurora Financial Planning chartered financial planner Aj Somal says: “This is a useful exercise. Anything that minimises the grey areas around the RDR for advisers can only benefit clients.”

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