Related provisions for COBS 6.1A.10

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To access the FCA Handbook Archive choose a date between 1 January 2001 and 31 December 2004 (From field only).

(1) 8A firm may continue to accept a commission, remuneration or benefit of any kind after 30 December 2012 if there is a clear link between the payment and an investment in a retail investment product which was made by the retail client following a personal recommendation made, or a transaction executed, on or before 30 December 2012. This is the case even if the firm makes a personal recommendation to the same retail client after 30 December 2012 to the extent that the continued
7‘Related service(s)’ for the purposes of COBS 6.1A includes:(1) arranging or executing a transaction which has been recommended to a retail client by the firm, an associate or another firm in the same group or conducting administrative tasks associated with that transaction; or(2) managing a relationship between a retail client (to whom the firm provides personal recommendations on retail investment products) and a discretionary investment manager or providing a service to such
Examples of payments and benefits that should not be accepted under the requirement to be paid through adviser charges include:(1) a share of the retail investment product charges or platform service provider's charges, or5retail investment product provider’s or platform service provider's5 revenues or profits; and5(2) a commission set and payable by a retail investment product provider in any jurisdiction.
In determining its charging structure and adviser charges a firm should have regard to its duties under the client's best interests rule. Practices which may indicate that a firm is not in compliance with this duty include:(1) varying its adviser charges inappropriately according to provider or, for substitutable and competing retail investment products, the type of retail investment product; or(2) allowing the availability or limitations of services offered by third parties
A firm is likely to be viewed as operating a charging structure that conceals the amount or purpose of its adviser charges if, for example:(1) it makes arrangements for amounts in excess of its adviser charges to be deducted from a retail client's investments from the outset, in order to be able to provide a cash refund to the retail client later; or(2) it provides other services to a retail client (for example, advising on a home finance transaction or advising on an equity release
A firm must not use an adviser charge which is structured to be payable by the retail client over a period of time unless (1) or (2) applies:(1) the adviser charge is in respect of an ongoing service for the provision of personal recommendations or related services and: (a) the firm has disclosed that service along with the adviser charge; and6(b) the retail client is provided with a right to cancel the ongoing service, which must be reasonable in all the circumstances, without
3If the price of the retail investment product may vary as a result of fluctuations in the financial markets and the adviser charge is expressed as a percentage of that price, a firm need not disclose to the retail client the total adviser charge payable to the firm or any of its associates by the retail client until after execution of the transaction, provided it then does so promptly.
A firm may include the information required by the rule on disclosure of total adviser charges (COBS 6.1A.24 R) in a suitability report.
5A firm and its associates may:(1) offer and pay a commission, remuneration or benefit of any kind in the circumstances set out in COBS 6.1B.5 R if:(a) the personal recommendation was made on or before 30 December 2012;(b) the offer and payment was permitted by the rules in force on 30 December 2012;(c) the contract under which the right to receive the commission, remuneration or benefit of any kind was entered into on or before 30 December 2012; (d) the terms of that contract