View more on these topics

FSA shoppers paid fees but no commission

Sifa is accusing the FSA of leading commission-based advisers “up the garden path” in its recent mystery-shopping exercise by leaving their efforts unrewarded while paying fee-based advisers for their time.

The second quality of advice review commissioned agency GfK to mystery-shop 50 companies, with the majority of shoppers attending two meetings with the firm.

The FSA allocated money to pay fee-based advisers for their work but refused to pay commission-based advisers for their efforts, which included producing a written recommendation and suitability report.

Sifa managing director Ian Muirhead says this is the first time that the FSA has asked advisers to carry out this much work as part of a mystery-shopping exercise.

He says: “Firms which operate on commission may be left unremunerated for their efforts in undertaking all the preliminary formalities and advice processes for ‘clients’ who never had any intention of doing business. One cannot help wondering about the ethics of the FSA leading firms up the garden path to this extent. It is not honourable and is a bit sneaky.”

An FSA spokesman says the lack of cash for commission-based advisers is a “consequence of their business model”. He says: “There was not the facility to remunerate commission-based advisers because no business was put through.”

Recommended

Enduring interests

I have been banging on for the past couple of weeks about the now seemingly unfashionable flexible interest in possession trust.

Three catalysts for European equities

By Rob Burnett, Manager of the Neptune European Opportunities Fund In recent weeks, the bear case for European equities has become more pronounced on the back of weaker-than-expected GDP data and deflation concerns. This softening in economic momentum has led some investors to question whether the ECB is behind the curve and indeed whether it […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment