The IMA is the latest party to warn of conflicts between the RDR and MiFID, in spite of the FSA's belief that it will not be overruled by Europe.
Guy Sears, director of wholesale at the fund management trade body, said that while the new version of MiFID was due to stop ‘independent’ advisers accepting commission from product providers, the proposals relied on too vague a definition of ‘independent’ advice, which would have little impact on the continent.
By contrast, the RDR will ban all UK advisers - independent or not - from accepting commission from product providers. The FSA says it has ensured the RDR will not be altered by the new version of MiFID, but some experts fear the RDR may lose its ‘gold-plated’ status.
In written evidence submitted to a House of Lords committee scrutinising the MiFID proposals, Mr Sears said: “The RDR bans commissions paid to any form of advisers [while] the MiFID proposals relate to ‘independent’ advisers only and there is no proper definition of independent or non-independent.
“Our European industry colleagues comment that no continental advisers will call themselves independent, and the ban as drafted will therefore have no real effect in practice.”
The IMA has instead proposed requiring all product providers to disclose how much they receive in charges “at least annually”, and all “non-advisory distributors” to disclose all commissions. Advisers should be banned from receiving commission regardless of independent status, the IMA added.
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