06/12/2011 - FSA Better Than Best For Own Platform DIFs

FSA Better Than Best For Own Platform DIFsFSA Better Than Best For Own Platform DIFs.

According to the Financial Services Authority (FSA), they expect it will be particularly difficult for companies to recommend their own distributor-influenced funds (DIFs) and meet the stronger independence requirements post retail distribution review (RDR).

The FSA has released a proposed update to its DIF factsheets, detailing how it expects RDR requirements to impact on the rules surrounding DIFs.

The FSA has stated that where IFAs were recommending DIFs, it expected to see evidence that their advice was:
  • Suitable
  • Made following a comprehensive and fair analysis of the relevant market in an unbiased and unrestricted manner.
  • Was in the customer’s best interests
  • Was in accordance with conflicts of interest requirements
The update also clarifies how RDR adviser charging rules will affect advisers' use of DIFs, outlining that companies advising on them will not be able to receive a share of the annual management charge.


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