The Financial Services Authority (FSA) is finally waking up to some of the flaws in its plan to ban platform cash rebates. The news that it is considering some concessions is welcome, although not as welcome as an outright reversal of the policy.
Despite the protests of most of the platform sector, it has always seemed unlikely that the FSA would ditch its plan, even though it has shown it is not averse to the odd U-turn or two over platform policy.
Having prolonged its platform reforms beyond the timetable of the retail distribution review, a further radical switch in approach would be too much to handle at too late a date. The fact that the platforms with the most work to do – Skandia, Cofunds and FundsNetwork – have been implementing changes based on the FSA’s current proposals suggests they do not expect any about-turns.
So it seems the interminable wait for the platform policy paper (first promised before the end of last year, now with no publication date even being proffered) is due to tweaking of existing policy.
An exemption from the cash rebate ban for small investment amounts will help to remove some complications. It will introduce some more in setting up two rebate systems, but presumably the FSA has judged that problem as less acute.
It could have avoided all of this had it not decided on the ban in the first place, but it’s a step in the right direction.