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Davy sees no evil in commission

Commission is not evil and should not be wiped out of the industry, SimplyBiz chairman Ken Davy told an audience at Money Marketing Live in Manchester on Tuesday.

Davy, speaking at a panel debate about the future of the intermediary, said it is not up to the FSA to decide what type of business model advisers should run, nor how clients should pay for their advice.

He said there is a role for fees and commission and provided it is made clear to the client how much they are paying and by what means, commission is acceptable.

Davy said: “It is a clear message coming out that many think there is something wrong with commission. It is not evil. Accountants, solicitors and investment banks all charge commission, although they may well have them dressed up as fees. As long as it is transparent, people can make their own judgement.”

When asked about the future of trail commission, the panel said it is here to stay.

Bankhall marketing director Richard Howells says: “I do not think there is any reason to be concerned. No other modern markets in Europe or elsewhere have put an end to trail and I see no threat to it now or in the future.”

Sesame head of proposition Alastair Conway says: “I think that client segmentation is key. The mass market would not be able to get advice unless commission remains available.”

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