Towry Law is calling on the FSA to force financial advisers into radical change to protect consumers, accusing much of the £3.2bn paid out in intitial commissions of being bribery from providers to attract new business.
Chief executive Andrew Fisher says there are five main areas he would like to see addressed to “clean up the industry”.
Fisher is reiterating his bold call for the total abolition of all initial and trail commission to financial advisers with fees being the only payment option.
He is calling on higher minimum educational standards and barriers to entry, the outlawing on “soft commissions”, paid by product providers to advisers – saying the industry needs integrity not stealth.
Fisher says advisers need to demonstrate their ability to offer holistic advice based on the requirement of the client and not be limited in their choice of solutions and finally, he says more stringent tests should be in place before advisers can use the “independent” label, not accepting financial support from, or being significantly owned by, product providers.
FIsher says: “It is almost five years since the Sandler report first exposed the various ways in which consumers were being financially disadvantaged by financial advisers and product providers.
As recently as last month, after numerous consultative exercises designed to improve matters, the FSA has acknowledged that too many firms continue to unfairly treat customers.
The industry has shown it cannot be trusted to reform quickly enough and it is now time for the FSA to move from its previous consultative approach and step in and impose change, instead.”