Where a maximum commission agreement would have made sense, instead we got menus, defined payments and all manner of regulatory hoops – at least partly because of the OFT. We now face an RDR ban on factoring instead of regulations allowing some factoring on regular-premium products.
In an almost mythical pursuit of fair trading, we are in danger of getting no trading from many IFAs and therefore less competition for the big players.
The answer, however, is pretty simple. There is a way to allow the FSA to guard against bias through standardised factoring but not close down one part of the savings market. The regulator could also look at allowing commercial organisations to offer factoring arrangements. Any OFT objection should be overruled on the grounds of consumer interest.