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On and off the menu – the timeline

January 2002

FSA announces plans for a defined-payment system whereby only fee-based advisers can call themselves independent.

October 2002

FSA drops plans for the defined-payment system in favour of Aifa’s suggestion of a payment menu, in the face of massive opposition to its original plans.

February 2004

FSA estimates the one-off industry costs of the menu at £39.75m, with ongoing compliance costs of £22m a year.

March 2004

Tories attack the proposed menu for being too rigid.

June 2004

Aifa warns that the menu plans are becoming too complex and will not be read by consumers.

December 2004

Depolarisation rules are published, including plans for the menu, with IFAs and multi-ties having to disclose market averages and single-tied advisers disclosing commission equivalence.

February 2005

Aifa complains that the menu market averages are wrong and make advisers look more expensive than they are.

April 2005

Aifa appeals to the Office of Fair Trading about the market averages.

June 2005

Menu becomes mandatory as part of depolarisation.

February 2006

Aifa research shows the majority of consumers are not paying attention to the menu.

August 2006

The OFT upholds Aifa’s complaint about market averages, leading to the FSA making changes to its calculations in its next update.

November 2006

FSA director of retail policy Dan Waters admits that the menu has not been a success and the FSA will look at a radical simplification as part of a Mifid postimplementation review.

January 2007

FSA applies to the European Commission for Article 4 exceptions to retain the menu and IDD under Mifid.

March 2007

European commissioner Charlie McCreevy warns that Mifid could turn into a ‘practical nightmare’ due to the number of add-ons requested.

May 2007

FSA withdraws applications to retain the menu and IDD under Mifid, announcing that it will implement the Mifid information requirements on November 1, temporarily supplemented by the payment menu and the initial disclosure document as guidance to these rules.


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Case study: administration — managing group life schemes

Our client leads the global market in high-tech electronics manufacturing and digital media. The trustees of the company’s final salary pension scheme insure death-in-service lump sum and dependants’ pension death benefits for active employees, as well as dependants’ pension benefits for deferred members (those who have left service).


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