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Category: Legal Technologies
26 October, 2012
The Financial Services Authority (FSA) has raised concerns over the way charging arrangements are disclosed to clients in a letter to product providers and platforms.
They claim that some firms currently do not have the right processes in place to "obtain and validate client instructions" in line with retail distribution review (RDR) requirements, meaning that many are left in the dark about existing remuneration arrangements.
A source at the FSA told Money Marketing: "The purpose of the letter is to remind firms to review their approach against the RDR requirements to see if they need to do any further work."
Should a provider facilitate an adviser charge, they explained, a validated client instruction must be obtained. If they don't have this, they will have to contact the client to get it.
However, some firms are currently relying on existing client consent arrangements instead, meaning RDR requirements aren't being met, the FSA explained to the news provider.
Although the exact contents of the letter have not been disclosed, it follows a similar correspondence from Standard Life to advisers stating trail revenue is at risk by failure to comply with new charging rules.
These are the latest in a growing list of changes to bring about greater disclosure and legal technology plays an integral role in improving this process.
Electronic Disclosure– Kroll Ontrack has the technological strength, expertise, and commitment to ensure your success in managing small e-disclosure projects as well as large volumes of electronic evidence legally, accurately and cost-effectively.