The financial services industry failed to provide any strong evidence to support its call for a relaxation of the ban on legacy commission, according to the regulator.
In its consultation paper on the treatment of legacy assets, published last week, the FSA confirmed that trail commission for ongoing advice can continue but legacy commission for changes to existing products after the RDR will be banned.
Product providers argue that huge system changes are needed to comply with the ban, which could force providers to stop accepting top-ups altogether. They add that where top-ups are accepted, consumers will end up paying twice, once through the adviser charge and once through commission factored into the price of the product.
But speaking to Money Marketing last week, FSA head of investment policy Peter Smith said: “Although a number of people have suggested to us that we should change the rules, nobody has provided any substantive evidence to us to support that argument. People have asserted the problem, but not substantiated it.”
Association of British Insurers director of financial conduct regulation Maggie Craig says: “This could have unintended negative consequences for consumers with existing investments.We want to ensure existing customers are not adversely affected and will work with the FSA to make sure consumers understand the changes to the advice landscape after December 31, 2012.”