CP13/4: Distribution of retail investments: referrals to discretionary investment managers and adviser complaints reporting

Why are we consulting on this Consultation Paper (CP)?

We are publishing this CP in response to questions we have received on how to apply our Retail Distribution Review (RDR) rules.  Our proposals cover:

• Payments to advisers for referrals to discretionary investment managers (DIMs), which are banned for new business under the RDR rules.  We make it clear what happens when an adviser recommends that a client places additional money with the same DIM from whom the adviser receives payments following a pre-RDR referral.
• Banning referral payments where an adviser firm does not provide personal recommendations to particular clients, but provides other services to them such as passing on information from the DIM.
• A minor amendment to our rules requiring complaints against individual advisers to be reported to us, to match the policy intention. This means that complaints concerning all activities when acting as a retail investment adviser – such as advice on shares and derivatives as well as retail investment products – should be included.

Who is this CP aimed at?

You should read this Consultation Paper if you are an adviser, discretionary investment manager or provider active in the retail investment market.

The proposals on referral payments may interest consumers and consumer bodies, as they will affect how firms interact with retail clients.  Clarifying complaints reporting will mean that consumers can be more confident that we will be aware if their adviser’s actions result in a complaint.

Consultation paper

Consultation Paper 13/4[2]

What are the next steps?

This consultation is closed

Want to find out more?

For more information:

• look at the FCA Handbook[3].