The UK’s Financial Conduct Authority (FCA) is conducting a review into the growing number of execution-only businesses that have come to market, including an investigation of practices surrounding buy lists and the retention of legacy commission.
The review will look at non-advised products and execution only providers with a view to issuing a report of the review findings in the first half of 2014.
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The review is in response to recent growth in the market and in the next couple of months execution-only brokers will be contacted by FCA investigators and asked for information about how they are doing business.
The regulator was checking whether consumers were getting what they wanted and needed from non-advised sales forces.
The regulator is expected to look into fund buy lists, a large part of many execution-only business models, as well as guided architecture processes. FCA will also examine other guided architecture models to ensure that they are generating the right results for clients.
In August, FCA board minutes also revealed that it had concerns over the continuation of commission payments on non-advised sales.
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By GlobalDataA FCA spokesman said: "We have noticed growth in non-advised investment sales and the early development of investment sales via streamlined, simplified advice processes.
"As part of the FCA’s new approach, we want to take an early look at these distribution channels to ensure that consumers are getting the right outcomes and, if necessary, provide clarification for firms," he added.
