More than half of pension providers and fund supermarkets expect the FSA to ban commission payments on execution-only business after the retail distribution review, research by Dunstan Thomas suggests.
Under the RDR, IFAs will need to charge clients a fee for advice rather than commission. The regulatory changes do not affect non-advised product sales.
A survey of 34 retirement product and providers shows 55 per cent believe execution-only business will not be allowed to continue to attract commission payments in the long-term.
Dunstan Thomas chief executive Chris Read says: “This uncertainty is a serious problem for companies trying to plan for the RDR.”
Bestinvest senior investment adviser Adrian Lowcock says: “I expect the FSA will look to remove commission on execution-only payments. This would make it easier for clients to compare charges across the market.”
Around one-quarter of the firms surveyed cite uncertainty about whether cash rebates will be payable from fund managers via platforms to client cash accounts as the biggest concern.
Uncertainty as to whether the EU’s packaged retail investment product regulations, which focus on investment information, will run counter to disclosure changes required by the RDR was the biggest concern for 18 per cent of respondents.
Nine per cent remain unsure if it will be up to the adviser or the provider to check if business is execution-only or advised.