The Institute of Financial Planning has warned that fee-based firms investing in new systems and staff ahead of the RDR might be unintentionally penalised by the changes.
Chief executive Nick Cann says: “The FSA has to make sure any new structure aligns with plans for the RDR.”
Sifa is also concerned with the proposals. Compliance director Ian Cockerill says the structure could adversely affect professional IFA firms that provide holistic advice where the fees may relate to tax and other unregulated activities.
He says: “How can a holistic IFA define what income came from regulated and unregulated activities? If they charge more for taxation advice and less for regulated activities, that is advantageous to the proposed structure. On the other hand, they might just charge a single fee and will not know how to split any income made.”
Do you think your firm could face lower FSA fees if the calculation was based on income rather than approved persons?
Is there a better option for apportioning fees?
Post your comments below.