The FSA believes the main obstacle to the menu payment system could be overcome if direct salesforces stopped selling their own products and sold products from other providers.
FSA head of retail projects David Severn says commission equivalence has been a stumbling block to finalising menu details but it would not be a serious impediment if banks and building societies stop manufacturing products and concentrate on distributing them. He says there would then be no reason why salespeople could not show consumers how much they get from providers, which IFAs would also be required to do.
Severn says the final decision on whether the menu would compare charges only within distribution sectors or across the whole market has not yet been made although he would prefer the latter.
He claims that even if only a small number of consumers start to ask “intrinsic questions” about the quality and cost of advice they get as a result of the menu, the experiment would be considered a success.
Severn says: “If they are not going to be selling in-house products but selling others instead, there is no reason that they would not be able to show the commission they get from providers, the same as IFAs would do.”
Sofa managing director Brian Lawless says: “If this were to happen, the menu, as a result, would be more of a success because the consumer would understand it more.”