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Genesis offers solution to ARs wanting to go independent

Genesis was the first network to make brokers aware of a problem arising out of the FSA regulations, which stipulate that a broker calling himself independent must offer his clients a whole of market product range and the option to pay a fee for the service provided. Where the client opts to pay a fee the gross procuration fee payable from the lender to the network has to be rebated to the client. Most networks assumed that any fee rebate would relate only to the net fee received by the AR from the network, which is not the case.

Frank Thurlby, head of compliance at Genesis, says: “Although this issue looks like an easy one to resolve, it does create a number of complex compliance issues for networks. Genesis has devised a solution to this problem, which means our ARs can describe themselves as

independent if they want to do so”

Genesis has developed an accounting process supported by a compliance audit trail, which enables ARs to fully rebate fees to their clients, whilstat the same time allowing Genesis to charge ARs for the compliance services they provide. It is not clear if any other networks have yet developed a workable solution to this problem.

Steven Atkins, group comploiance diector at Freedom, says: “I think this is a good idea, I was surprised that more ARs haven&#39t gone down the independent route. The KFIs need to reflect the tie up with lenders.”

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