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Susan Edmunds
Susan Edmunds
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EDRs not an easy fit for advisers

Monday 8th of September 2014

The 2008 Financial Service Providers Act requires all financial service providers to be registered and members of an EDR.

There are three EDRs that deal with financial advisers: Financial Services Complaints Ltd (FSCL), Financial Dispute Resolution (FDR), and the Insurance and Savings Ombudsman scheme (ISO).

FSCL general manager Trevor Slater said advisers were about 15% of his members, by income.

“Advisers may not be the single largest group we have but are the group I feel has been the most challenged by the disputes resolution legislation. The way legislation is set up, it’s free for consumers but members have to pay a fee to join [a scheme] and have to pay a complaint fee. For smaller operators, that can be quite a lot of money.  I empathise with advisers.”

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Latest Comments
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@first time caller - I can see the complexity you highlight, but as above, investors should be able to see what they are paying without having to reference multiple documents. Investment admin can track and report deductions for tax, withdrawals, fees et al, would be /should be straightforward to aggregate advice fees into costs at member level... at least I hope so.
14 hours ago Goldcard
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@goldcard - how would you propose that a fund manager calculates the TER to include adviser fees given not all clients pay them and different advisers charge different fees, not to mention some advisors charge different fees to different clients? The advice fee gets disclosed in the adviser's disclosure statement and the statement of advice, so the client can add that to the published TER of the fund they are invested in to see how much they are paying overall.
1 day ago First time caller
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Schedule 4 of the FMCA regs 2014, particularly clauses 2(1) and 53(3) provide the basis for excluding individually charged advice fees from the statutory TER. This was introduced with the best of intentions, but now it is little more than an invisibility cloak for deductions from member accounts.
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