Associated Planners outlaws soft dollar payments
Financial planning dealer groupAssociated Planners Financial Services(APFS) announced today, in what will be an industry first, its intentions to turn its back on soft dollar benefits.
APFS managing director Ray Miles says the stance is an “ethical, as well as commonsense” approach, and that the dealer group will no longer accept fund manager rebates and member firms will no longer accept trips or conferences offered by suppliers.
APFS is also leading a working party with the hopes of creating an official position on what it describes as the “industry wide problem” regarding disclosure and definitions surrounding soft dollar benefits.
Senior representatives fromBT,Credit Suisse,NorwichandChallengeras well as financial planning group Guest McLeod are involved with the working party, which will meet next week to discuss issues such as fund manager rebates, conferences, volume bonuses and sponsorship of seminars.
Miles says the working party’s aim is to establish a policy supporting the removal of soft dollar benefits, which may influence adviser or dealer group recommendations.
“Customers don’t come to us [as an industry] because of stuff like this. Once we get our heads around the fact that this is wrong, and the momentum gets going with other dealer group and advisers, then we can get rid of it.”
However, APFS’s definition of soft dollar payments will not exclude all contact between manufacturers and advisers, with invitations from suppliers that are “focused on solving client problems and further useful relationships with advisers” given the green light.
“The rule of thumb would be if it has the capacity to influence an adviser to recommend a product that’s worse than another product, then it’s not on,” Miles says.
More information on what will be banned will be detailed as the working party progresses.
Miles says the issue of soft dollar was voted on by the group’s advisers at its recent conference, with 94 per cent of advisers choosing to forgo any soft dollar payments, at the cost of funding their own conferences.
“There was a resounding feeling that the amount of damage it does to the industry isn’t worth the effort. We’re the most advanced and most regulated financial services industry in the world, but we’re still getting flak. We can fix it here.”
Fund manager rebates received by APFS will now be given to charity until they can be passed back to clients.
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