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&#39Commission and better than best to stay,&#39 says MP

Shadow Paymaster General Howard Flight is calling on the FSA to clarify its position on IFA commission and better than best, saying he was told they would be retained.

In a private conversation held with a senior FSA official only days after the publication of CP121 in January, Flight said he was told the better than best rules would not be ditched but the restriction on the stake that providers can invest in an IFA would be raised to 20 per cent from 10 per cent.

He was assured that clients would still be allowed to pay their IFA a nominal retainer fee and then continue paying through commission for the bulk of advice received.

Both of these assurances appear to contravene CP121 which states better than best will be scrapped and, in order to continue as an IFA, advisers will have to work through the defined-payment system.

Flight says: “It was confirmed to me there would be restrictions as to how much business an IFA which is owned by a provider could refer to that provider. I was also told that situations where an IFA is paid a retainer fee in addition to commission would be allowed to continue.”

The FSA was not available for comment about Flight&#39s claims.

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