Threesixty Services is calling on Skandia and Fidelity Funds Network to confirm they will stop paying trail commission to advisers when the FCA’s platform legacy rules are implemented.
In last month’s platform policy statement, the FCA said from April 2016 all legacy payments between fund managers and platforms will be banned but it does not prohibit trail payments to advisers.
As fund supermarkets, both Skandia and FundsNetwork have large legacy books with significant trail being paid to advisers on past business.
Threesixty Services managing director Phil Young says this should stop from 2016 in order to promote transparency around charging.
He says: “The payment of trail after 2016 goes against the spirit of the platform policy statement. Advisers should prepare for the end of trail from 2016 regardless of the uncertainty.”
Fidelity head of business development Ed Dymott says: “Over the next few years most advised assets will migrate to adviser charging. But there is nothing in the FCA statement that goes beyond the RDR legacy commission rules to stop trail commission to advisers via platforms.”
A Skandia spokesman says: “Given the three years before the ban on retained rebates is introduced, it is likely most clients will be transitioned into an adviser charging model well ahead of deadline. We are looking at alternative options for our bundled book of business dependent on likely demand from advisers.”
Cofunds has confirmed it will move all clients into clean share classes.
Director of marketing Verona Smith says: “Our intention is to act in the spirit of the RDR and move to a clean share class world without rebates. We think this is in the best interests of the customer and transparency.”