In its response to the FSA discussion paper on platforms, Tisa says disclosure outcomes, which meet the FSA’s requirement for transparency of platform charges can be delivered without imposing an outright ban on rebates.
Director of portfolio and retirement planning Malcolm Small says the FSA’s approach is “fraught with potential unintended consequences”.
He says: “Whilst there are some practices that may be considered undesirable, I am concerned that the proposed regulatory approach is fraught with potential unintended consequences.
“The FSA has made considerable efforts and this discussion paper displays a thorough understanding of the wrap and platform market and the issues within it.
“There is much to agree with, however, its directions of travel gives us cause for concern in some areas. I hope that we can work proactively with the FSA to address these concerns.”
Tisa says a ban on rebates from fund managers to providers and from platforms to consumers would “strike at the heart” of legitimate operating models and pricing structures.
It adds that the possible ban on rebates is not matched by proposals to restrict such payments from fund managers to life and pension fund companies.
Tisa says the focus on rebates for advised business rather than execution-only creates an unlevel playing field as platforms will have to operate two different models.