Investment Management Association chief executive Richard Saunders has said the FSA’s ban on cash rebates could lead to higher charges for consumers.
Saunders says the ban, confirmed in the FSA’s platform consultation paper last month, could even lead to greater opacity in fund charges, in an official blog.
Saunders says: “Consequences which are quite possible include a continuation of initial commissions by another name, higher charges to consumers, and greater opacity about who is paying what to whom.”
He also describes the FSA’s suggestion that fund providers rebate investors by handing advisers extra units in funds as “an appalling prospect”.
IMA director of authorised funds and tax Julie Patterson told Money Marketing earlier this week it is “naïve” to assume the FSA’s retail distribution review will drive down overall charges.