Partnership has confirmed it is being investigated by the FCA as part of the regulator’s crackdown on incentives between providers and advisers which undermine the RDR.
In a statement to the stock market this morning, the firm says it received notification last night from the FCA that it has appointed investigators to probe the distribution agreement between the insurer and an adviser firm.
It says: “The investigation will seek to determine whether the Company has contravened the FCA’s rules, including changes introduced by the RDR.”
“The notification makes clear that ‘the appointment of investigators does not mean that the FCA has determined that rule breaches and/or other contraventions or offences have occurred’.”
Partnership’s shares fell 7 per cent yesterday following a report in the Financial Times suggesting it was one of two firms being investigated by the regulator.
The FCA this week revealed that two firms could face enforcement action after a thematic review found evidence that arrangements between providers and advice firms could undermine the RDR.
The regulator asked 26 life insurers and advisory firms to provide information about their service or distribution agreements. It received and reviewed 80 agreements and found just over half of the firms had deals in place which could breach inducement rules.
These included payments by life insurers to adviser firms which appeared to be linked to securing product sales, insurers incentivising advisers to promote products and joint ventures which could create conflicts of interest and potentially lead to biased advice.
Partnership is involved in a number of distribution deals with independent and restricted adviser firms.
Openwork says it is not involved in any enforcement action related to the FCA’s thematic review into incentives.
Partnership has a distribution relationship with Sesame, alongside a number of other adviser firms.
In April 2010, Partnership bought a 50 per cent stake in Sesame Bankhall Group’s retirement referral arm Gateway Specialist Advice Services. At the time it was estimated the deal cost between £500,000 and £1m.
Sesame refused to comment.
In a statement, Henderson has confirmed that it is not involved in any threat of enforcement action as part of the FCA’s thematic review.
A Henderson spokesman says: “We cannot discuss commercially confidential matters, but we are satisfied our UK retail joint ventures meet both the regulations and the spirit of RDR. We can confirm that Henderson is neither in enforcement nor has it been referred to enforcement for this or any other matter.”