The IMA says many of the regulator’s intentions and observations on adviser charging outlined in the latest retail distribution review consultation paper are sensible but it questions its proposals for fund managers.
IMA director of authorised funds & tax Julie Patterson says: “They will account for a significant proportion of the £140m annual cost identified in the FSA’s cost benefit analysis. Yet that analysis identifies no mis-selling in relation to funds. We shall consider the implications in more detail and continue to debate them with the FSA.”
The FSA’s latest proposals prohibit fund managers from making ongoing deductions made from a fund for particular consumers without creating separate share classes.
The FSA says this would allow fund managers to choose to offer a reasonable range of different share classes if they wished to support different levels of ongoing adviser charges.
The IMA expresses disappointment that structured deposits were not included in the wider scope of products included in the latest proposals.
It also says the labelling of the types of advice available remains a concern.
Patterson says: “We question whether the ‘simple advice process’ and ‘basic advice’ are needed, and having both can only result in confusion. It is crucial that this is resolved before implementation.”