FSA will allow factoring for network members
The FSA says it will allow networks to offer members a factoring service as long as it is available to all advisers for all long-term savings and retirement products.
The clarification comes after Sesame voiced concerns to Money Marketing that the FSA’s final RDR rules appeared to ban product providers and networks from offering a factoring service, which was a surprise turn as the regulator had not previously expressed concern over adviser-led services.
The FSA’s RDR policy statement, published last month, states: “We have gone ahead with the ban on factoring and made clear in our rules that it applies to both product providers and advisers.”
This statement appeared to have put paid to plans by Sesame and other networks to launch their own factoring services in light of the FSA’s intention to ban provider factoring.
Last September, Sesame said it would offer its advisers a form of factoring if the FSA refuses to allow up-front payments from providers.
The FSA has now clarified its position. A spokeswoman told Money Marketing: “If it is a payment mechanism available to all members for all long-term savings and retirement products, the FSA would allow it.”
Sesame Bankhall chief operating officer Stephen Young says this means that the network can go ahead and develop a service but he criticises the unclear wording of the FSA’s policy statement.
He says: “If you look at the wording in the policy statement, it seems to be very definite in saying that the rules also apply to advisers, so, as a network, it see-med that we would be prevented from offering a service.
But he adds: “If the FSA are confirming that networks can in fact offer a factoring service to members, then we will defin-itely develop an offering.”
SimplyBiz chairman Ken Davy, who also vowed to offer an in-house factoring service in the event of a provider ban, says he still intends to do so.
He says: “We are still looking at what we can do to offer an effective solution for IFAs.”