The Financial Services Authority (FSA) has today published Consultation Paper 12/12: Payments to platform service providers and cash rebates from providers to consumers (CP 12/12). The paper contains a number of proposals designed to enhance transparency and competition within the platforms market.
In line with the new adviser charging rules introduced by the Retail Distribution Review at the end of this year, CP 12/12 proposes a ban on payments from product providers to platforms. Under the new rules, this service will be paid for by a platform charge that is agreed with the consumer.
Cash rebates paid from product charges to consumers will also be banned. This ban will apply to new business written following the implementation of the final rules. It will not apply to retail investment products purchased before the rules come into force. Rebates made through additional investments into the product (unit rebates) will be allowed.
It is intended that these new rules will apply to advised and non-advised business.
The FSA will publish a policy statement with the final rules before the end of 2012. Firms will have over a year to make the necessary changes to their business models as the new rules come into force on 31 December 2013.