TISA calls for re-think on rebates
TISA – Tax Incentivised Savings Association – is calling for a more open dialogue on the use of rebates in its response to the FSA’s Discussion Paper – Platforms: delivering the RDR and other issues for discussion.
Rather than the outright ban on rebates – whatever their description – TISA argues that disclosure outcomes can be delivered which meet the FSA’s requirement for transparency of platform charges and at the same time help the consumer.
Malcolm Small, TISA Director of Portfolio and Retirement Planning 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 in the Paper, however, its directions of travel give us cause for concern in some areas. I hope that we can work proactively with the FSA to address these concerns.”
Specific concerns highlighted by TISA in its response include:
• A ban on rebates both from fund managers to providers and from platforms to consumers would strike at the heart of legitimate operating models and pricing structures.
• The focus on rebates for ‘advised’ business rather than execution-only creates an un-level playing field with the prospect of platforms having to operate two different models.
• The possible ban on rebates from fund managers to platforms and from fund managers to underlying clients is not matched by any parallel proposal to restrict such payments from fund managers to life and pension fund companies.
• Banning all rebates – even when wholly and transparently credited to clients – would be likely to lead to the need to create multiple share classes for funds, reflecting the different commercial relationships involved.
• The ongoing treatment of legacy business has considerable potential for unintended consequences in adviser and platform behaviour.
TISA is leading a pan-industry project to support the FSA’s nascent requirement for platform-to-platform re-registration to be fully operational by the end of 2012 and believes it will be in a position to deliver this well before then.
Ends
For a copy of TISA’s full consultation response, please see: http://www.tisa.uk.com/publications/259_TISARESPONSEDISCUSSIONPAPER102V1.pdf
For further information, please contact:
Malcolm Small, Director of Portfolio & Retirement Planning, Mobile: 07989 500771malcolm.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 trade association 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 at the same time 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 to the sector and its consumer interest. TISA’s remit extends across the broad spectrum of government sponsored savings and investment vehicles.