She said: “If, at the end of 2012, an adviser firm has a right to receive trail commission, we will not be seeking to interfere with that. And if, for example, an advisory business is sold, our new rules will not prevent entitlements to trail commission from being transferred to the new firm.
“Of course, after 2012, it will not be possible to generate new trail commission entitlements and, over time, trail commission will peter out altogether in the investment market.”
The Association of Independent Financial Advisers (AIFA) has today welcomed the clarification from the Financial Services Authority (FSA) over the impact of the Retail Distribution Review (RDR) on existing trail commission payments.
Andrew Strange, director of policy at AIFA, said: “The recently announced trail commission rules presented a real threat to adviser firms. The comments from FSA are therefore a welcome confirmation that existing trail commission will continue for firms post 2012. We are grateful that the regulator has listened to our concerns, and those of the adviser community.
“There is still work to be done to ensure these public comments are enshrined in the rule book. But this is a positive step forward for adviser firms seeking certainty on the impact of the RDR.
“It is a positive sign that the regulator has demonstrated it is willing to constructively engage with the industry when presented with a well thought out and convincing case. As a profession we still face a great many challenges. The key for the profession is to stand united and ensure we deliver a better framework for adviser firms.”
