View more on these topics

‘Follow retail example’

Commission Round Table report by Sam Shaw

The financial services industry should adopt the business model used in other retail sectors if it is to leave behind the problems with remuneration, says Helm Godfrey deputy chairman Roger SandersHe said at the Money Marketing round table meeting on commission last week that, unlike virtually any other retail sector, such as electronics, grocery or clothing, financial services fails to use the simple model of buying wholesale at a discounted rate and then marking up products to sell in a retail environment but with commission disclosed to the customer.

He told the round table panel of industry experts, including product providers, IFAs, big distribution networks and support service providers, that he felt the UK retail market was missing a trick. Sanders compared financial products with white goods that have greater transparency about commission when customers buy the products.

He said the FSA’s assertion that the current distribution model is not fit for purpose reflects how the Government, politicians, the regulator and Brussels are all trying to influence the debate.

Sanders said: “The model must be questioned if no one is making any money out of it. To find a solution for the future, we must look to where we have come from.

“The model of retail financial services is dysfunctional. We do not operate like any other retail market, where you are able to purchase products at a wholesale price, told what the cost of the commission is and distribute it in a retail space.”

Recommended

Capita admin support for MetLife

Capita will provide admin support to MetLife on its Sipp and trustee investment plan business, which is set for launch in January 2007.

Ways and means

The Government is aware of the problems surrounding means-testing but resolving them is difficult

Focus on Protection

“What’s in a nod? That which we call advice by any other name would smell as sweet.”

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