VATINS5312 - Services of an insurance intermediary: introductory services: Retail Distribution Review

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

  • improve the clarity with which firms describe their services to consumers
  • address the potential for advisers 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 do not include protection-only insurance or charges for trading in securities.

»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).