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FSA hires staff to stop ‘commission gluttony’

The FSA is recruiting additional supervisors over the next three years in a bid to prevent “commission gluttony” among advisers in the run-up to the RDR.

Speaking at a Chartered Insurance Institute RDR conference in London last week, director of conduct policy Sheila Nicoll said the regulator wants to ensure that firms looking to sidestep the RDR rules are dealt with by enforcement.

Nicoll said: “We are looking at adviser behaviour in the run-up to the RDR and we have already seen some behaviours that we think may pose risks to consumers.

“In supervision areas, we are hiring extra supervisors between now and 2013 to focus specifically on firm behaviours before 2013 and to enforce our rules when they take effect. We all have an interest in ensuring that firms are in the right space and ready to better serve investors.”

Nicoll said the FSA has a particular concern about advisers seeking to build up a generous commission pipeline before 2013.

She said: “We hear from market participants and from commentators how firms may either be ignoring the RDR and hoping it will go away or, worse, looking to avoid our new policy to undertake a form of commission gluttony before 2013.

“We will not hesitate to take action against firms who do not take compliance seriously and we will not wait until 2013 either. I hope we will not find advisers guiding people into unsuitable products in order to maximise the commission that they can be paid before the end of 2012. But if that is the case, we will take action.”

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