From 1 January 2013 changes within the financial services industry will seriously affect how you pay for your financial advice for investments (e.g. personal pensions, bonds, annuities, unit and investment trusts, individual savings accounts and savings plans). These changes are the result of the Retail Distribution Review (RDR) which has been carried out by the Financial Services Authority (FSA).
What will be different for you from January 2013?
- The FSA will ban commission payments paid to us by product providers for arranging your investments, including rebating commission which works to your advantage.
- You will only be able to pay for our services through an upfront ‘Adviser Charge’ paid as a fee directly to CFM or paid as a deduction from your investment; this will be a separate cost from the cost of the product.
- Our normal advice will be subject to VAT which is effectively a 20% increase in costs.
- The FSA will introduce complex reporting requirements for advisers which will also increase our costs.
- The FSA will reduce your choice as to how you want to pay for your advice. The availability of reasonably priced general advice will be much reduced.
Existing business that was advised and administered by commission income will continue on this basis beyond January 2013. This means that we will be able to continue to provide you with an ongoing advice and administration service at no extra cost to you. So existing business with us should, therefore, only be altered as a last resort.
What you need to do!
We ask that you take a few minutes to consider what impact the RDR will have on our relationship and, if like us at CFM, you are concerned at the likely effect the RDR will have,please write as soon as possible to your MP to voice your concerns. If you have any questions or would like further information about the RDR, do give us a ring '01245 283594.
In spite of the RDR, we will do everything we can to increase your wealth and preserve the service we presently offer to you.
