Adviser category, remuneration proposals out for comment

Input is sought by 31 March 2020 on a discussion paper proposing ‘a previously mooted variation of the two-tier model’ for categorising financial advisers, reports CompliNEWS contributor Pam Saxby. Released in December 2019, but only recently posted on the Financial Sector Conduct Authority (FSCA) website, the document updates stakeholders and requests feedback on key issues emerging from a retail distribution review begun in 2014 by the former Financial Services Board. To that end, specific questions are posed on the terminology used in describing adviser categories; the practical implications of two-tier adviser categorisation; limiting product supplier agents’ advice to home group products and services; the use of ‘independent’ and ‘financial planner’ as designations; product supplier responsibility; and the possibility of a ‘multi-tied’ advice model for different product classes. Input should be made using the template provided.

Comment is also sought on a document setting out the FSCA’s implementation policy proposals for a ‘special’ intermediary remuneration dispensation for savings and investment products aimed at the low-income market. The policy envisaged represents the next step in a process aimed at ‘incentivising the development and distribution of simple, better-value products that are affordable, have a transparent pricing structure, have appropriate features and meet the needs of low-income and under-served customers. The need for a ‘special’ dispensation emerged during the broader retail distribution review process. Input on the specific questions raised should be made by 28 February 2020 using the template provided.

Three other retail distribution review documents released in December 2019 update stakeholders on the status of the review; the FSCA’s latest position on ‘equivalence of reward’ and the way forward; and how the findings of a recent intermediary activity segmentation analysis are likely to inform the FSCA’s regulatory and supervisory approach. Any legislative instruments emerging from these documents will be the subject of a public consultation process.