The Investment Management Association welcomes the FSA's attempt to improve the transparency of retail products.
Today the FSA has proposed banning both payments from product providers to platforms and cash rebates from product providers to investors. This will mean that investors will pay platform fees directly, giving them a better understanding of where their money is going.
Responding to today's publication, Julie Patterson, IMA Director of Authorised Funds and Tax said:
"IMA supports increased transparency in the retail market. Breaking down fees to show who receives what is essential to support this concept. Detailed disclosure is needed on a regular basis not only when an investment is first made.
"However, the splitting of payments will require the industry to overhaul its administration processes and mean that, in future, more firms will be administering much smaller sums of money. There is a risk that the end cost of investing could rise as a result. There needs to be an efficient mechanism that facilitates these payments in a fully transparent way. We shall continue our discussions with the FSA as to how this can be achieved operationally under its proposed rules.
"There is also a serious concern that those with modest sums to invest will be deterred by these new measures, and that ordinary investors will no longer be able to benefit from bulk discounts currently secured by intermediaries that aggregate the orders of many investors.
"We shall need to give careful consideration to the potential impact of the proposed extension of the rules to ISA and SIPP managers. This too could cause administrative costs to increase."
|
