FCA admits it will consider return to commission

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FCA acting chief executive Tracey McDermott has admitted the Financial Advice Market Review may reintroduce some form of commission but claims the regulator will not reverse the RDR.

Money Marketing revealed last week that the FAMR panel was considering radical reforms in a bid to boost access to advice, including lower qualifications and a return to commission.

In an interview with BBC Radio 4’s Money Box programme McDermott said the regulator had received 290 responses to its FAMR consultation and would be examining those over the next month.

Asked whether it was true if a return to commission was on the table, McDermott said: “We do not want to go back to a world where we have the problems of pre-RDR. What we do want to look at is what is the best way of delivering advice and guidance across the market. So I wouldn’t rule out that there may be some element of commission, but we are not going to reverse the RDR.”

She also defended the FCA over claims that it was no longer independent of Government, after the regulator shelved an inquiry into pay and culture at banks, and following a decision not to publish its findings from its work on inducements.

McDermott said: “Nothing could be further from the truth. We are not going soft on the banks, we are not being told what to do by the Government.

“We have objectives which are set for us by parliament in statute, and we are determined to deliver on those.

“If you look at what we have been doing over the past six months while I have been in the role as chief executive, you will see that we have continued to take action against the industry, both in terms of penalties on firms and individuals, and absolutely delivering the right outcomes for consumers in financial markets.”

She added the FCA did hold banks to account where appropriate.