Now, at the consumer-level this all sounds pretty technical/boring/inward-looking but should the FSA proceed in line with last week’s press reports we really will be on the cusp of a new dawn. Should the suggestions that legacy commission will be more broadly defined than previously expected and that fund managers would be banned from paying life companies for distributing their products prove accurate we really are going to find ourselves in a new world. And a much better one at that.

Considering the legacy commission issue first, I think everyone agrees that the long-term nature of many products leads to complexity in terms of changing rules down the track. In this instance it seems that where a client tops-up an existing investment or switches between funds on the advice of his or her adviser, the adviser will no longer be able to receive commission from the product provider.

This is probably more seismic than it might seem as most legacy product systems will be unable to cope with the change and it is therefore possible that clients will leave legacy arrangements as they are and invest any new money in newer, more modern solutions. I would also hazard a view that the change will accelerate the market shift toward platforms and particularly toward truly open, transparent platforms such as Nucleus, Transact and Novia.

As with any change there will always be some people disadvantaged but the regulator has to draw a line somewhere. Industry calls for a five-year sunset clause had some merit but then again if something has been wrong for a long time there is little merit in perpetuating the root cause.

A slightly bizarre footnote is that moving from one platform to another will not be considered advice and will therefore not be challenged by these rules. I can only imagine this holding for unwrapped holdings where the switch is not from one packaged product to another. It’s hard to imagine an in-specie Sipp transfer being outside the scope of the rules!

In a rather challenging week for life company IT executives (and pricing actuaries), the suggestion that fund managers be banned from providing rebates to life offices is progressive in the extreme. It won’t be true everywhere but there are many, many examples where the pricing structure of the product is significantly dependent on the product provider receiving shelf space kickbacks or distribution allowances from asset managers to make the whole thing just about work. Banning such payments is intuitively obvious at a time when the FSA is seeing to remove all bias from retail financial services.

Implementing any ban could prove to be the biggest nightmare for a sector already under the strain of advisers/clients increasingly adopting platforms and the scrutiny of analysts questioning the business model. Even if one can put the catastrophic economic impact to one side (for a moment) the technology and operational implications will be massive. Spending loads of money to ensure you can no longer receive a significant chunk of your revenue is seldom a cool place to be!

On the straight financial point, this has been coming for a long, long time. In fact, I’d argue that the sector’s decline began when providers started offering the funds of third parties and has only accelerated since then. When the IFP was established and advice became more client-focused and the early pioneers of truly open architecture started their movement the writing really was on the wall.

Should a rebate ban come into force, those walls will surely start to tumble, the sector will crumble and billions of pounds of client money will be liberated. Given the new transparency is gradually creating a more competitive market one would hope that most of the money moving around will find itself in a better place.

David Bowie said he still didn’t know what he was waiting for. Well, we’ve been waiting for progress like this for a while now. Ch…ch…ch…changes indeed.