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Consumer Panel welcomes platform cash rebate ban
by Daniel Grote on Aug 01, 2011 at 13:08
The Financial Services Consumer Panel has welcomed the Financial Services Authority's ban on platform cash rebates but called for clarity over the date of its implementation.
The Consumer Panel said the ban would help ensure the principles of the retail distribution review (RDR)d be upheld and remove bias in the IFA sector, and that is was disappointed no firm date for implementation had been set.
'Rebates can create bias in favour of more costly products and a potential mechanism for advisers to receive commission,' said Adam Phillips (pictured), Consumer Panel chair. 'Banning them is the right move.'
He added: 'Given the delay in implementing the ban, it is vital that the FSA steps up its supervision activity to ensure that consumers are protected during the transition period. Any further business model analysis must be conducted quickly so that the ban can be put in place as soon as possible.'
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3 comments so far. Why not have your say?
Mark Graddage
Aug 02, 2011 at 19:10
Surely,all that needs to happen to ensure the cash goes to clients not advisers in extra commission, is to put in place a requirement to pay any cash rebates to the plan not the adviser/provider.Banning cash rebates altogether seems detrimental to the client.
report thisMartin Benn
Aug 06, 2011 at 10:05
I cannot see why cash rebates should be band if all it is going to achieve is avoid the possibility of bias in favour of more costly products. Surely you could avoid the cost of extra regulation by widening the disclosure rules to encompass fund platforms and alike. This would also avoid the possibility of any future stelth like earnings going under the radar. It would also mean that all earnings would be have to be disclosed to the client who after all is the one needs to know and the one who decides whether are happy!
report thisMartin Benn
Aug 06, 2011 at 10:37
The regulator is in danger of creating a bland, uninteresting, uninspiring, totalitarian financial system where no-one is allowed to take any risks as they that they may make a loss. Of course lots of people all over the uk lose for more through gambling on the lottery, horses, utility switching, debt company’s and have you been miss-sold a whatever company’s cold calling (withholding their number) of which I receive at least 5 or 6 each and every week etc etc etc, does anybody else? Why does the regulator not spend more of their time and our money dealing with the institutions that prey on the more vulnerable instead of trying to dismantle a system which by and large works well and most importantly improves people’s financial wellbeing?
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