Fund rebate disclosures by platforms, COBS 6.4.3

jamesd

Platforms are required by the FSA COBS 6.4.3 to disclose the amount of rebates they receive from fund managers and to do that in a form that makes it possible to understand the basis for the pricing, which is normally percentage based.

This is to track my experience with firms when I've asked for that information. Please share the information about how you get on if you make such requests.

Positive:

Skandia: pre-sales agreed to provide the details if I provided a list of the funds of interest to me. Providing list of funds. They had previously mentioned in a press report that they had received only five requests for the information from customers in the last year, mine won't increase that.

Negative:

Standard Life, work group personal pension: post dedicated to them here. Outright refusal to comply citing commercial sensitivity. Asked them to reconsider. Also notified the FSA Consumer Helpline which filled out an investigation form, no telling what, if anything, might eventually follow from that. Their second try was that COBS 6.4.3 only applies to retailing IFAs not them.

Hargreaves Lansdown, Vantage service (SIPP, ISA and fund accounts): Said was not required to comply (I hadn't mentioned COBS 6.4.3) but provided totals in cash terms for all years and investment pots, which served to conceal the percentages. Better than nothing but not compliant, will follow up later at a more convenient time.



If you're interested in finding this out so you can see what you're paying, you might want to follow this process:

1. Request saying "Please tell me the percentage portion of fund annual management charges that are rebated to your firm, as required by COBS 6.4.3 and the requirement to make the basis for charging - a percentage - clear."

2. If the answer is unsatisfactory make a formal complaint and ask them to ensure that the firm's Compliance Officer is aware of the refusal to comply with COBS.

3. If the answer remains unsatisfactory, make a complaint to the Financial Ombudsman Service, which handles consumer enforcement of this rule.

COBS 6.4.3 can be found at http://fsahandbook.info/FSA/html/handbook/COBS/6/4

crittertog

Hi James,

Would you mind expanding on your statement, "they had received only five requests for the information from customers in the last year, mine won't increase that."? I'm just wondering if you're implying you didn't like what they told you..? (or if I'm reading too much into it)

Thanks

jamesd

I'm not a customer at the moment so it's not possible for my request to change the count of those who made the request while a customer.

jamesd

Looks as though Standard Life will become a saga, so a post dedicated to them.

Standard Life, work group personal pension:

Outright refusal to comply citing commercial sensitivity. Asked them to reconsider and ensure that the compliance person from the FSA Register was aware before I moved on to step 2, a formal complaint. Also notified the FSA Consumer Helpline which filled out an investigation form, no telling what, if anything, might eventually follow from that.

Their response from their compliance department is that COBS 6.4.3 only applies to the IFA or retailer, not the platform, so they don't have to disclose, only the selling IFA has to disclose their commission, and they provided a copy of that disclosure.

Since this contradicts the FSA's Consumer Helpline and various items in the financial press it's time for another reply to them making sure that they know that this isn't just going to go away. But first I'll give the FSA Consumer Helpline a call to see if they have any tips for me.

fairleads

jamesd wrote: »

Looks as though Standard Life will become a saga, so a post dedicated to them.

Standard Life, work group personal pension:

Outright refusal to comply citing commercial sensitivity. Asked them to reconsider and ensure that the compliance person from the FSA Register was aware before I moved on to step 2, a formal complaint. Also notified the FSA Consumer Helpline which filled out an investigation form, no telling what, if anything, might eventually follow from that.

Their response from their compliance department is that COBS 6.4.3 only applies to the IFA or retailer, not the platform, so they don't have to disclose, only the selling IFA has to disclose their commission, and they provided a copy of that disclosure.

Since this contradicts the FSA's Consumer Helpline and various items in the financial press it's time for another reply to them making sure that they know that this isn't just going to go away. But first I'll give the FSA Consumer Helpline a call to see if they have any tips for me.

A bit rich coming from a person who in the recent past - in a bid to prove that contributions into pension funds are the supreme investment - chose to ignore such details as charges, growth and annuity taxation.

Lokolo

fairleads wrote: »

A bit rich coming from a person who in the recent past - in a bid to prove that contributions into pension funds are the supreme investment - chose to ignore such details as charges, growth and annuity taxation.

I would prefer to trust jamesd than you, where most of the stuff that comes out of your mouth is usually a load of crap

fairleads

Lokolo wrote: »

I would prefer to trust jamesd than you, where most of the stuff that comes out of your mouth is usually a load of crap

Each to his, or her, own and the facts that you call crap are the product of some very comprehensive spreadsheets.

crittertog

jamesd wrote: »

I'm not a customer at the moment so it's not possible for my request to change the count of those who made the request while a customer.

Ah, thanks (and doh - should have seen it!). I read it as though there was something unfavourable in the numbers they gave you. Obviously reading too much into it (or reading without having consumed the required number of cups of coffee! :rotfl:)