The FSA has warned advisers it will be difficult for them to remain independent post-RDR and advise on distributor influenced funds.
Speaking at the Tax Incentivised Savings Association Dif seminar today in London, FSA head of investment policy Peter Smith said advisers would find it difficult, but not impossible, to continue to advise on Difs and maintain an independent status.
He said: “We expect it to be difficult for firms to prove advice on distributor funds is unbiased or independent. There are clearly conflicts of interest and any conflicts of interest need to be managed in a way where the firm ensure they are providing unbiased and unrestricted advice.”
He added: “We are aware some firms recommend their Difs to the majority of consumers and we are concerned this undermines their position as independent today, never mind in the future.”
Smith went on to say the regulator would also be watching restricted firms to ensure any advice on funds they were giving was suitable for their clients and needed to “show that this is the case for each and every customer”.