Most advisers against cash rebate ban

An overwhelming majority of advisers think cash rebates on platforms should be allowed to continue, recent research suggests.

According to an Ascentric study of 90 advisers at the wrap's recent seminars, 86% of IFAs think fund manager rebates to client cash accounts should continue.

The FSA proposed banning cash rebates in its November's consultation paper, citing their potential to disguise the cost of advice, but the plan met with widespread opposition from the platform community who argued it would be overly-complex and detrimental to consumers.

Final rules are now expected in Q3 after the FSA pushed back its previous Q2 deadline. Despite a concerted lobbying effort by major platform players, with the exception of Skandia, most industry figures now think the regulator will ban cash rebates.

The Ascentric survey also suggests the adviser community strongly supports unbundled charging structures on platforms, with 90% agreeing or strongly agreeing such a mechanism gives client transparency.

A previous FSA plan to ban rebates paid from fund managers to platforms appeared to sound the death-knell for bundled charging structures and require platforms to unbundle their charges. 

However, the FSA appeared to do something of a u-turn in its November consultation paper when it said fund manager rebates could continue provided they are fully disclosed.

"There are some very clear messages here including an overwhelming view about unbundling and cash rebates from a good cross-section of advisers," said Ascentric sales and marketing director Richard Goodall (pictured). "We hope the FSA considers this response in the run up to regulation."

Elsewhere, the survey found 93% of advisers felt their business will be RDR ready with 85% distinctly optimistic about the future of financial services.

However, there were very mixed views over the economy, with only 21% believing the UK was out of recession.