Discretionary fund managers, advisers and platforms have backed the FSA’s plans to ban DFM referral payments to advisers, saying it reflects a shift away from the “backhander” deals of the past.
Existing referral payments can continue, but advisers would not be paid extra for post-RDR investments.
Capital Asset Management chief executive Alan Smith says: “In a world of complete transparency every component part of the value chain has to charge clearly for its service. Introductory fees smack of backhanders and under-the-counter payments.”
Raymond James Investment Services director of relationship management and business support Cynthia Poole says facilitating clear charges for DFM and adviser services has always been part of the company’s RDR plans. She says: “We were almost surprised to see an announcement like this because we had taken it as a given.”
Seven Investment Management chief executive Tom Sheridan says: “What the FSA is doing is forbidding opaque ‘kick-backs’ from DFMs to distributors. That is pretty reasonable.”
Atkinson Bolton Consulting director Simon Gibson says: “We have to understand that to be deemed as professional we have to act that way. That is not to say what has gone on in the past is wrong or inappropriate, but it is in the past.”