Figures from investment services platform, FundsNetwork, indicate that trail commission is becoming a thing of the past, with less than half of most advisers’ income coming from trail commission.
The research also shows that 52% of firms now have 75% or more of their revenue coming from platforms through fees.
More than half of those surveyed said they planned to move all their clients to fee arrangements before the end of the year, rather than wait until the deadline.
With significant progress being made to take control and move clients to fees, it is clear that trail commission is playing an increasingly smaller part in advisory firms’ revenue, said FundsNetwork.
“As we edge ever closer to the deadline for the sunset changes, it’s extremely encouraging to see that such significant strides have been taken by firms"
The Financial Conduct Authority’s ‘sunset clause’ will ban platforms from retaining cash rebates from 6 April 2016. On this date those platforms with bundled charges will need to agree a new charge with consumers or give away their services for free.
Platforms are offering advisers support around the sunset changes, with 83% praising platforms for helping them to move clients from bundled to unbundled assets, and subsequently setting them up on fee arrangements.
Continued support
“As we edge ever closer to the deadline for the sunset changes, it’s extremely encouraging to see that such significant strides have been taken by firms to engage with clients and agree fee arrangements where previously trail commission existed,” said Jon Everill, head of advisory services at FundsNetwork.
“We will of course continue to support firms throughout the sunset changes but with only few months to go, we would also like to urge firms to continue making the necessary preparations ahead of deadline.”
FundsNetwork will be converting any remaining bundled assets on the platform to clean share classes from November 2015 to meet its regulatory obligations ahead of the deadline.
