According to the firm, regulating decency limits should not be the sole responsibility of product providers because they will not always have all the information required to fully asses an individual case.
Skandia says product providers do have a role in ensuring that customers receive the outcome but an independent body such as the Professional Standards Board needs to be given formal responsibility for enforcing these limits via an agreed code of ethics.
The latest RDR consultation paper states that there is a ‘need for product providers to be able to decline, or at least alert the FSA to, requests from adviser firms for payment of extreme adviser charges’.
Skandia says it will be virtually impossible for product providers to accurately determine when to decline requests from adviser firms.
It notes that a key principles of adviser charging is that the amount paid to the adviser is agreed between the adviser and each individual client and that the provider should have no influence over the payment.
It says therefore a product provider having to enforce decency limits is not consistent with this principle.
It says product providers will also not know what advisory services the adviser has delivered to their client surrounding a particular product sale.
Skandia strategy director Michelle Cracknell says: “Product providers certainly have a role to play in setting decency limits but they should not become the regulator. There should be a stand alone body that is responsible for policing decency limits and investigating situations where these limits are exceeded.”