»Ê¹ÚÌåÓýapp

New regulatory rules come into force on 31 December 2012 following the FSA’s Retail Distribution Review (RDR) (now the Financial Conduct Authority (FCA)). »Ê¹ÚÌåÓýapp key objectives of the RDR are to:

• improve the clarity with which firms describe their services to consumers
• address the potential for adviser remuneration to distort consumer outcomes, and
• increase the professional standards of advisers

»Ê¹ÚÌåÓýapp new rules require advisers to move from receiving commissions to fees agreed with customers in respect of all Retail Investment Products as defined by the FCA which are:

1. a life policy; or
2. a unit; or
3. a stakeholder pension scheme; or
4. a personal pension scheme; or
5. an interest in an investment trust savings scheme; or
6. a security in an investment trust; or
7. any other designated investment which offers exposure to underlying financial assets, in a packaged form which modifies that exposure when compared with a direct holding in the financial asset; or
8. a structured capital-at-risk product;

whether or not any of a to h are held within an ISA or CTF.

Retail Investment Products (RIPs) do not include protection-only insurance or charges for trading in securities.

Not all RIPs as defined by the FCA are exempt financial products for VAT purposes; whether or not a financial product or component of a wrapper is subject to VAT is determined by VAT legislation

»Ê¹ÚÌåÓýapp new rules apply to all product distributors and providers across the retail investment market involved in advised-sales. »Ê¹ÚÌåÓýappy also apply to advised-sales via platforms. »Ê¹ÚÌåÓýappse rules do not apply to investment management under a discretionary mandate or to execution only transactions, which are covered in other sections of VAT guidance (see VATFIN7530 and VATFIN5800).