The Association of British Insurers has voiced its concern over the lack of clarity surrounding legacy rules and said the regulator's latest stance marks a "fundamental" change to the Retail Distribution Review (RDR).
In a legacy commission paper sent to trade bodies in April, the
FSA said it will permit trail commission for business sold pre-2012, but restated it would be "undesirable in principle" for legacy commission to be paid post RDR. It defined legacy commission as an 'additional payment' made to advisers in relation to a contract signed before 31 December 2012 but as a result of an event taking place after that date.
However, the
ABI said the new policy does not just fail to provide clarification but rather marks a sea-change in thinking. "The FSA's letter represents a fundamental change to the RDR, which is very late in the day with little time to implement changes ahead of the 31 December 2012 deadline", it said.
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