The FSA's consultation paper 10/8 published today proposes retail investment firms must disclose protection renumeration.
This Consultation Paper (CP) sets out proposals for pure protection sales by investment advisers.
The FSA is proposing the following new rules:
Retail investment firms must explain how they are remunerated for pure protection services associated with investment advice and disclose the amount of commission they receive if the customer then purchases a pure protection product. This applies to either personal recommendations for pure protection or arranging the sale of pure protection products.
The FSA also proposes to ammend rules to allow firms who elect to sell pure protection under the Conduct of Business Sourcebook (COBS), rather than the Insurance Conduct of Business Sourcebook (ICOBS), to continue to do so after the Retail Distribution Review (RDR) is implemented without having to apply the rules on Adviser Charging to their pure protection sales.
The consultation is not proposing any new requirements regarding how firms can be remunerated for their pure protection sales. Firms may adopt fee or commission-based
remuneration models.
