View more on these topics

‘Don’t scrap commission benchmark’

The FSA is wrong to remove market average commission rates from its proposed disclosure documents, says Aegon.

Head of business regulation Steven Cameron says he agrees that the payment menu and initial disclosure documents are too lengthy and complex but market averages must be made available to consumers.

He says: “My concern is that if you spend the time analysing some of the information in the menu, it is quite helpful, in particular, the market average commission rates.

“Consumers do not buy financial services products very often and they definitely do not know what is a reasonable amount to be charged for the advice they receive. Having a market average is one way of benchmarking what is a reasonable charge.”

Cameron says if market averages are omitted from the new disclosure document, they should be made available to consumers elsewhere.

Informed Choice joint managing director Martin Bamford says doing away with market average commission could be a positive step. He says: “The market average commission rates used in the menu were distorted in some cases. They included commission from non-advised sales as well as advised sales, so it was difficult to use them with confidence.”

Compliance consultant Adam Samuel says the problem with the FSA’s proposal is that customers do not read or understand disclosure documents.

He says terms of business or client agreement documents which have clear and simple headings would be more easily understood by consumers.

Samuel says: “Research the FSA has commissioned does not justify lengthening the rulebook by the addition of further guidance. The regulator needs to accept that only an adviser can explain the nature of his or her services by reference to the agreement that he makes with his clients.”

Recommended

Delicate balance

You do not need a crystal ball to predict that UK interest rates are going down. After monetary policy committee decisions to cut rates in December and February, the debate for many is now simply about how much more and how quickly rates are going to be cut.Many commentators were disappointed that the MPC did […]

Strong returns as Pru sees with-profits boom

With-profits business is booming for Prudential which revealed this week that its life fund has delivered returns of 91 per cent over five years and 134 per cent over 10 years.The fund returned 7.2 per cent last year and Pru says allits endowments will meet repayment targets.Total retail with-profits sales in 2007 rose by 21 […]

P/E exercises

Aweak economic background is now widely regarded as a given but there is much less consensus about whether stocks are a buy or a sell at current levels. On the face of it, simple valuation data sends a clear signal that stocks are cheap. For example, according to MSCI data at the end of January, […]

F&C sets up multi investment trust

F&C is to launch a multi-manager investment trust offering investors access to both growth and income. The F&C managed portfolio trust will offer investorsa choice of two multi-manager portfolios each with25 holdings. The trust willbe run by Peter Hewitt.

Graphic Content – August

Given the release of employment data from the US on 5 August, we wanted to focus on employment data in this month’s Graphic Content. The Graphic Content below shows us that young and middle-aged workers were hit the hardest by the Great Recession and have never caught up. Since the job market started to recover […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com