Zurich has warned that the UK’s strained relations with Europe could prevent it being granted an exemption from Mifid II, which would see the return of commission for restricted advisers.
The latest draft of Mifid II, published in October, revealed the European Commission’s intention to only introduce a ban on commission for independent advisers.
The FSA is looking to secure an exemption from the directive to gold-plate the commission ban and push ahead with RDR proposals to ban all types of advisers from receiving commission. The Government and industry bodies are expected to join forces with the regulator in its campaign.
Speaking at the Tenet conference in Windsor last week, Zurich chief growth officer David Etherington said there is a risk the exemption will not be granted.
He said: “There is a real risk that in two years’ time commission could be back in the restricted advice area because we do not have the same relationship with Europe that we used to have.”
Cambourne Financial Planning director Mark Loyd- all says the regulator’s failure to foresee the European stance could end up costing the industry.
He says: “I can see a situation where the regulator ends up in the European Court over this and the industry ends up footing the bill because of the ego of the regulator and its misjudgement of European policy.”