TISA announces Distributor Funds review
TISA is to facilitate an independent review into Distributor Funds in the next stage of its project to deliver a pan-industry solution to the concerns surrounding the suitability and charges related to these funds.
A TISA Executive Committee involving all the interested sectors of the industry has been established to oversee this work. The Committee has agreed to commission a review to further investigate how Distributor Funds are being used in practice, what is needed to deliver positive consumer outcomes and to identify what regulatory best practice would look like.
An expert external agency with a track record in regulatory affairs will be asked to carry out an authoritative and independent review and to provide a report by the end of May. Funding for the review will come from members of the Executive Committee.
According to the FSA’s Retail Conduct Risk Outlook 2011, published last week, there are at least 40 firms offering these funds to their customers, with around £2bn of assets under management and 10,000 customers with assets invested. The FSA has identified two key risks associated with Distributor Funds – the conflict of interest and the complexity and levels of charges.
TISA Director of Policy Malcolm Small says:
“The FSA report is helpful insofar as it puts Distributor Funds firmly on the regulatory agenda and that means that the industry must face up to the concerns and develop a solution. The FSA has made it clear that it is monitoring this market and that it may need to intervene unless standards improve.
“Many advisers are looking to change their business model in response to the RDR and this is likely to lead to an increased use of Distributor Funds. It’s therefore vital that we identify the standards that all participants need to meet in order for these funds to achieve their potential to produce good consumer outcomes.
“TISA is able to bring interested parties together – as we are doing with our Platform re-registration project – to consider all the issues, identify what is best for the consumer, agree what constitutes optimum practice and deliver what is necessary to create a common set of industry standards.”
Ends……
For further information, please contact:
Malcolm Small, Director of Policy, Mobile: 07989 500771 Email:malcolm.small@tisa.uk.com
Issued on behalf of TISA by Cauldron Consulting, contact Steve Radford – Tel: 020 3178 7238, Mobile: 07889 903786 Email: steve.radford@cauldron-consulting.com
Notes for Editors
The Tax Incentivised Savings Association (TISA)
TISA is the premier industry funded body in the UK retail savings and investment industry. By engaging with member firms, government, political parties, regulators and consumer groups TISA’s ultimate goal is always to further consumers’ best interests. It seeks to improve the range, features and quality of savings and investment schemes available whilst encouraging more people to save for their financial security and peace of mind.
Uniquely, TISA is able to articulate the opinions of the whole savings and investments marketplace through its membership comprising over 120 member firms involved in the supply or distribution of products. TISA’s remit extends across the broad spectrum of government sponsored savings and investment vehicles.