Page 90 - Profile's Unit Trusts & Collective Investments - March 2026

Chapter 5 Legislation and guidelines

The RDR proposed several regulatory reforms related to the provision of financial advice and
the distribution of financial products. Amongst other things, the RDR sought to incorporate the
principles contained in the FSCA’s TCF code.
A number of the RDR proposals have been implemented while others will be implemented using
a combination of instruments available under existing financial sector laws (such as the Financial
Sector Regulation Act) and the planned Conduct of Financial Institutions (COFI) Act.
One of the RDR prosposals was to introduce new terminology, including product supplier agent
(PSA) for tied broker and registered financial adviser (RFA), for an independent financial adviser
(IFA). The proposed RDR suggested PSAs would need to state that they do not offer independent
advice but merely represent the products of their employer.
These proposals have been put on hold pending the enactment of the COFI Bill when the
terminology used for financial advisers will be aligned to the licences that are issued for diffrent
activities.
The RDR proposals included attempts to more clearly delineate intermediation activities,
outsourced services and advice. The FSCA was considering several possible legislative proposals,
including:
R rules to facilitate the charging of advice fees separate from commissions in order to achieve a
clear demarcation of advice and “services as intermediary”;
R an approval process to replace the current outsourcing notification process, plus further
reporting requirements in respect of outsourcing.
Another RDR proposal that may be considered after COFI is enacted sought to stop agents
earning recurring fees unless the financial adviser is providing recurring advice. Currently many
financial advisers earn commission on recurring monthly payments (such as debit orders) even if
they do not see clients regularly to review their portfolios, needs and risk profiles.
Treating customers fairly (TCF)
One of the responsibilities of the FSCA is to protect consumers of financial products offered by
regulated entities. As part of this objective, the FSCA released a treating customers fairly discussion
paper in May 2010 based on the TCF initiative of the UK Financial Services Authority (FSA) started
in 2001. In November 2011 ASISA published a TCF Best Practices Guideline for its members, which
has since been updated, most recently in 2022, to reflect evolving regulatory expectations and
industry best practices.

Objective Outcome
Right culture and governance TCF is entrenched in the organisation so that the fair
treatment of customers is central to corporate culture
Right targeting and product suitability Products are correctly designed for specifically identified
consumer groups and sold only to the targeted groups
Right information and disclosure Straightforward information is provided and customers
are kept informed prior to, during and after the sale
Right advice The provision of suitable advice that takes into account
customers’ circumstances
Right delivery Products are supplied that meet customer expectations
and live up to promises made in terms of performance
and service levels
Right post-sale treatment Product switches, customer queries and service
complaints are facilitated without the imposition of
undue administrative barriers
The TCF principles aim to ensure that customers enjoy good service, straightforward
communication, informed advice and appropriate products from providers of financial services and

88 Profile’s Unit Trusts & Collective Investments March 2026