The FSA has raised concerns that joint ventures between providers and advisers could undermine the objectives of the RDR.
Speaking at an Association of British Insurers RDR conference in London this week, FSA head of investment policy David Geale discussed the Dear CEO letter the regulator sent to providers and advisers last month warning against payments which work around the commission ban.
Geale said the aim of the RDR was to create a level playing field where advisers can compete based on service rather than on provider deals.
He said: “This may include also joint ventures between firms in the distribution chain, where the key intention of the joint venture seems to be to secure distribution. We have seen a number of such deals where participation in terms of financial contribution or shareholding, or indeed financial returns coming out of that joint venture, appear to be potentially one-sided.”
Geale said the regulator would need to look at these kind of arrangements and “take a view”.
He added: “On the face of it we would view such arrangements as potentially having the ability to undermine the outcome the RDR is seeking to deliver.
“What we prefer to see is viable, financially robust adviser firms, and we expect many firms will be able to achieve this on their own merits. We do not want it to be achieved through subsidies, or backdoor commissions, or whatever you choose to call them.”
Hudson Green & Associates principal Ian Hudson says: “The FSA is right to be looking closely at these relationships. If there is a good case for a joint venture, it need to a be a clear and transparent arrangement.”