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FSA in row over RPB trail cash

The FSA has angered IFAs by telling providers to continue paying trail commission to professional firms such as accountants and solicitors after N2 even if they are no longer authorised by the regulator.

A circular seen by Money Marketing from the ABI to its members states: “The FSA has clarified that product provider firms are not prevented from continuing to pay commission to an ex-registered profess-ional body firm that does not become authorised by the FSA at N2.”

This was in response to questions raised by ABI members about what they should do after November 30 (N2) when many RPB firms currently authorised by the FSA will no longer be allowed to conduct investment business.

But some IFAs believe only authorised firms should be paid as they have to meet regulatory requirements and fees.

Inter-Alliance says RPBs should be linking up with IFAs for investment business in the interest of consumer protection.

In a separate move to meet N2 requirements, the Institute of Chartered Accountants in England and Wales has appointed Bankhall to provide support services and is encouraging firms to refer clients to the network&#39s member IFAs.

IFA Baronworth Investments director Colin Jackson says: “Trail commission should only be paid to authorised organisations. IFAs have to pay huge amounts to stay regulated.”

FSA spokeswoman Jackie Blyth says: “This is really a commercial decision between firms.”

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This year threatens to be a challenging one for UK dividend hunters. Last year saw an all-time record amount paid out in UK dividends — some £97.4bn, according to research from Capita Dividend Monitor. Yet as Capita also pointed out, out the biggest single factor driving the growth in the fourth quarter of last year was easy to identify: the rising US dollar. 

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