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LIA calls on FSA to move all advisers to fee basis

The LIA is calling on the FSA to consider a radical proposal which would move advice away from commission to a fee-charging structure.

In its response to the FSA&#39s consultation paper CP04/3: Reforming Polarisation – A Menu For Being Open With Consumers, the LIA asks if the entire advisory sector could be moved to a new fee-charging basis as it believes this would remove any suspicions that advisers are biased by commission.

The LIA advocates drawing up a fee-charging template separately identifying the elements of advice – order taking, arranging and ongoing service. This could be used by all advisers to create a fee menu, giving consumers the choice to either pay the adviser&#39s costs directly to the adviser or have them costed into the product.

The LIA believes that the decision on the menu has probably already been taken but points out that it is still possible for the FSA to stop and evaluate new alternatives, otherwise there is a risk of incurring a considerable new cost with little practical benefit.

Public affairs director John Ellis says: “The merit of this approach would be that, once and for all, we would be able to get away from the suspicion that commission incentivisation biases recommendations.”


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Until now, the Treasury select committee has focused its attention on product providers. Split caps, endowments and personal pensions have all been analysed by chairman John McFall&#39s committee. But now attention has turned to IFAs, sending out shockwaves through the industry. It has to be said that the select committee&#39s handling of the hearing attended […]

Enable network offers free PI deal

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JOHCM explores Japan

J O Hambro Capital Management has established the JOHCM Japan Fund, a Dublin-domiciled Oeic that invests in between 40 and 60 Japanese stocks. The Fund is benchmarked against the Japanese Topix index, although the fund manager, Scott McGlashan is not bound tightly to this. McGlashan has almost 30 years&#39 experience in fund management, including 23 […]

Unfinished business?

Pension specialist Fiona Tait gives an update on three big announcements from the 2016 Budget – Pensions Advice Allowance (PAA), the Lifetime ISA (LISA) and the pension dashboard. £500 Pensions Advice Allowance What’s new Under current rules it is possible to deduct an adviser charge from a defined contribution pension fund to pay for financial […]


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