Investors to pay upfront fees on investments
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.People will have to pay upfront fees when they buy investments through online platforms like Fidelity's FundsNetwork Hargreaves Lansdown's Vantage, under new rules proposed by the Financial Conduct Authority.
At present platforms are allowed to be paid by fund management firms but the watchdog intends to scrap the commission payments as it already has for financial advisers. Eventually, by 2016, all funds will have to be "clean" (commission free) however you buy them, with no kick-back or rebate paid to intermediaries.
The FCA said the rebates made it hard for consumers to make price and product comparisons and could lead some platforms to favour financial firms which pay high rebates and not including those which refuse to pay.
Christopher Woolard, director of policy, risk and research at the FCA, said: "Platforms provide a valuable service but investors are often unclear on what that service costs.
"These rules ensure that plat- forms put customers at the heart of their business. Customers will know what they are paying and the service that they can expect."
Platforms must start selling clean funds from next April and stop collecting rebates on older investments from April 2016.
Platform bosses said the new rules are as expected. Ian Gorham of Hargreaves Lansdown, said: "We have planned for all of these." Ed Dymott of Fidelity said: "We are well positioned to meet these requirements."
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments