Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Has FSA made the outsourcing market less saucy?

2 comments
Has FSA made the outsourcing market less saucy?

You will be hard pressed to find a more competitive field in financial services than the outsourcing market at the moment.

The retail distribution review has opened a whole new channel of opportunity for discretionary managers as regulatory-burdened advisers outsource investment.

Last week the Financial Services Authority (FSA) sought to clean the playing field up by banning discretionaries from dangling juicy kickbacks in front of advisers.

The City watchdog must have smelled something rotten to issue the ban - which firms have been cheeky enough to tout for business in such a non-transparent manner in the stiffer regulatory climate?

Wealth Manager spoke to a number of senior figures in the industry who stressed there was nothing untoward at their practices, while wondering whether the FSA is making a fuss about nothing.

Standard Life Wealth director and head of strategy David Tiller told us: ‘[I don’t think] it’s a common practice – or at least it isn’t any longer. Most of the big firms have put a lot of resources into ensuring their propositions are compliant.’

However, he did suggest this could be an issue for some of the industry’s smaller firms. ‘There is a very broad eco-system of companies in the sector, so maybe this is how some smaller companies hope to win business,’ Tiller suggested.

Meanwhile Brooks Macdonald founder Chris Macdonald said the ban would make little difference to his firm’s prospects. ‘The way we have to report fees to advisers is completely transparent and has been since 1991,’ he said.

Others such as Quilter director Pamela Reid feels the FSA could have acted a little earlier, with RDR set to come in at the end of the year. ‘It would have been very helpful to have had this three months ago, but from our point of view we are prepared,' Reid said. ‘It is not a surprise and we are not going to have to make any amendments from what we have in place.’

This may be the luxury the likes of Quilter, Standard Life Wealth and Brooks Macdonald can afford. But perhaps for smaller firms desperate to get some kind of edge on the big boys, things could be about to get a little tougher.

* For the full story and detailed analysis see this week's issue of Wealth Manager magazine

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play WMR: Why Russia will lose this war

WMR: Why Russia will lose this war

Author and journalist Adam Lebor believes a perfect storm is brewing when it comes to the Russian economy. .

Play WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

Chief economic adviser to London mayor Boris Johnson outlines the geo-political risks in Asia and explains why the risk of another eurozone crisis must not be underestimated.

Play Japan's slump, the umbrella revolution and the battle for Brazil

Japan's slump, the umbrella revolution and the battle for Brazil

With the arrows of Abenomics appearing to be missing their targets and political uncertainty rife in Hong Kong and Brazil we take a look at investor sentiment in this week's Investment Pulse

Your Business: Cover Star Club

Profile: The adviser that tempted Robin Minter-Kemp on board

Profile: The adviser that tempted Robin Minter-Kemp on board

It is rare to meet an impassioned individual who is willing to bang the drum for investment advisory right now

Wealth Manager on Twitter