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Platform cash rebates ban will increase cost and complexity for fund managers

26 April 2013

The FCA’s decision to ban cash rebates on new business from 2014 and legacy business from 2016 for investment platforms will increase complexity for fund managers and put further downward pressure on their charges, says Deloitte, the business advisory firm.

Andrew Power, lead RDR partner at Deloitte, said:

“The FCA’s decision to ban cash rebates is in line with the objective of the Retail Distribution Review, and the change will ensure that cash rebates cannot be used to offset charges for advice.

“Platforms are likely to accelerate the move to clean share classes and they will want to negotiate deals with fund managers for individual discounted share classes. This will be challenging for fund managers who will not want the time-consuming and expensive process of creating multiple share classes for the same fund. The creation of a sunset clause for legacy rebates will accelerate the timescales and the demand.

“It will also hasten consolidation in the platform market as some platforms utilise their scale and capabilities to negotiate better terms from fund managers. The existence of multiple share classes will make movement across platforms potentially more complex, despite re-registration rules.”


Notes to editors
About Deloitte

In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

Member of Deloitte Touche Tohmatsu Limited.

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David Gwyer
Deloitte LLP
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