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FSA relaxes rules for provider investment

The removal of the better than best rule makes it easier for product providers to invest in intermediaries but providing software or training will be restricted under FSA guidelines.

The FSA has made clear that any investment by a product provider in an adviser firm must be on commercial terms which are objectively comparable with the terms on which an independent unconnected person would be willing to make an investment or provide a loan. Providers may only give money or assistance to firms for the development of software if this generates equivalent cost savings for the provider or consumers.

The FSA reiterates that inducement payments from providers to secure intermediary distribution are not allowed and infringements of the regulations will not be treated lightly.

Training facilities can only be given to a firm if they are made generally available to other firms which give or might give advice on the provider’s products.

Independent firms must disclose any credit made to them by a provider while firms which are part of a group must disclose every circumstance where the amount of credit they have received from the provider exceeds 10 per cent of their share and loan capital.

The FSA allows IFA firms to advise employees on their employer’s group personal pension without compromising their right to describe themselves as independent and this exemption has been extended to employer stakeholder pension schemes as they are sold in a similar way.

Informed Choice managing director Nick Bamford says: “The removal of better than best does make it easier for providers to invest in distributors and we are seeing signs of action in this area. Some of the barriers that existed have gone.”


Aiming for global growth

Investec Asset Management has created an onshore version of its offshore global energy fund in response to IFA demand for a Ucits-qualifying fund in this sector. The fund will mirror the Guernsey-domiciled GSF global energy fund and will aim for growth by investing globally in companies involved in the explanation, production or distribution of oil, […]

ABI welcomes FSA depolarisation rules

The Association of British Insurers welcomes the announcent from the FSA on depoplarisation rules.ABI head of life and pensions Chris Kenny says: “This is an important change. The industry has been working hard to make it a success and will continue to do so.”

Independent view

The Government got it spectacularly wrong on pricing so maybe it is time to at least try leveraging distribution.


Natixis Global Asset Management’s quarterly Portfolio Barometer offers insights into UK financial advisers’ model portfolios and the allocation decisions they are making. Natixis’s Portfolio Research & Consulting Group works with financial advisers and other intermediaries to analyse and enhance their model portfolios and help them develop investor portfolios suited to today’s complex markets. The Portfolio […]


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