The FSA is planning to outline explicit rules which prevent payments between advisers and discretionary fund managers.
The regulator will issue a consultation in the autumn setting out clearly that no payments can be made to advisers who are outsourcing investment management to a DFM.
FSA head of investment intermediaries Linda Woodall says: “We expect discretionary managers to stop payments to advisers if that adviser continues to offer advice to a client in any form, not just on the assets held by the discretionary manager. We will be clarifying these rules shortly.”
An FSA spokeswoman says although the regulator felt its rules on adviser charging under the RDR were already clear, the consultation will look to specifically address the issue of payments by DFM services from next year.
The FSA told adviser firms in July to clearly explain to clients the DFM’s role where there is no direct contract in place between the DFM and the client. The statement was made as part of the regulator’s final guidance on centralised investment propositions and replacement business.
Page Russell director Tim Page says: “This is a little fire that is flaring up around the bonfire that is the RDR. The FSA policy team is just plugging any loopholes and ensuring its RDR rules are watertight.”