There are ways that product providers and intermediaries can develop their relationship and stay within the rules.
Providers can help intermediaries with finance for developing software or computer facilities, provided that it results in equivalent cost savings for the provider or for consumers.
Some providers have exp-ressed concerns over the clarity of these rules, saying they need to be tightened up.
Providers can take a stake in an intermediary, provided it is less than 10 per cent, and commercial loans can be made to intermediaries.
Payment of extra commission is also possible for providers, as the FSA has placed no cap on commission, but this must be disclosed on the payment menu and may be seen as an unattractive option.
Legal & General says if it is in doubt over whether a proposal might conflict with FSA rules it would check the position with the regulator. It says it would advise an intermediary with a business proposition which is different from accepted practices to check their proposal with the FSA before presenting it to a provider.
Friends Provident head of UK distribution Simon Clamp says: “The rules on providing finance for IT development are unclear but a lot of other FSA rules are unclear, too. When things change, as is happening with the onset of depolarisation, people explore the rules as much as possible.”