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RDR to create independent advice and sales advice channels

The FSA will introduce independent advice and sales advice channels under the retail distribution review, with both camps that offer investment advice required to hold QCA level four qualifications.

Independent advisers will need to offer unbiased, unrestricted advice and remuneration must be set by advisers with no influence from product providers.

The FSA says it wanted to scrap commission altogether, but legal barriers from the EU prevented it from doing so.

Instead, the FSA says: “By the end of 2012 any payment for advisory services made through the customer’s product or investment must be funded directly by a matching deduction from that product or investment made at the same time as that payment.”

The sales advice channel will cater for those offering restricted advice, including tied agents, guided sales and execution only models.

The FSA says it will consult further on how to implement the changes and make them clear to consumers.

The FSA also will introduce an overarching Independent Professional Standards Board, which will be established as soon as possible as a sub-committee of the FSA Board.

The papers states: “After a period, the IPSB may then seek its own statutory powers and become fully independent, outside of the FSA. At this point, if it is within the IPSB’s legal powers, the IPSB should require all PFAs to have a relationship with it through a professional body.”


‘Ministers could be jailed over pensions’

Conservative Shadow Treasury Chief Secretary Philip Hammond claims if Government ministers were subject to FSA regulation they would be jailed for some of the promises they have made on pension personal accounts.

Right on the money

As the retail distribution review wrestles with the issue of IFA remuneration, many in the mortgage market believe changes are on the horizon to the way that brokers are paid.


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