FSA announces plans for a defined-payment system whereby only fee-based advisers can call themselves independent.
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.
FSA estimates the one-off industry costs of the menu at £39.75m, with ongoing compliance costs of £22m a year.
Tories attack the proposed menu for being too rigid.
Aifa warns that the menu plans are becoming too complex and will not be read by consumers.
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.
Aifa complains that the menu market averages are wrong and make advisers look more expensive than they are.
Aifa appeals to the Office of Fair Trading about the market averages.
Menu becomes mandatory as part of depolarisation.
Aifa research shows the majority of consumers are not paying attention to the menu.
The OFT upholds Aifa’s complaint about market averages, leading to the FSA making changes to its calculations in its next update.
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.
FSA applies to the European Commission for Article 4 exceptions to retain the menu and IDD under Mifid.
European commissioner Charlie McCreevy warns that Mifid could turn into a ‘practical nightmare’ due to the number of add-ons requested.
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.