View more on these topics

FSA warns providers over sham sales to rake in high commission

The FSA has warned it will crack down on advisers and providers who try and take advantage of the retail distribution review transition period to sell high-commission products.

In the feedback statement released on Tuesday, the FSA hit out at providers which it says are increasing commission rates, particularly on insurance bond business, to stimulate sales in difficult market conditions.

The regulator says there is evidence that providers may be using the RDR as an excuse to boost commission by saying they are offering remuneration flexibility to advisers. But it warns this may lead to “further commission increases and the possibility of unsuitable sales”.

It says it will be watching out for providers offering “closing-down” commission deals and advisers churning policies before initial commission is withdrawn.

It also warns providers against trying to get around the clampdown on remuneration practices by creating alternative financial arrangements with adviser firms.

Anand Associates financial architect James Brook says: “Bancassurers will no doubt be trying to squeeze the last ounce of commission out of people before the deadline. It would be a dreadful shame and a damning indictment of those providers and advisers if they do what the FSA fears they are going to and they should be ashamed.”


Family first

Stepping down as PFS president was bitter-sweet but I look forward to supporting Paul Lothian during his term for what will be a defining year for our profession.

Value for money in DC pensions

The Pension Policy Institute (PPI)’s recent report “Value for money in DC pensions” tries to identify factors by which people can assess whether their pension offers fair value for money (VFM). Fiona Tait provides an overview of the findings. Positive Outcomes It is extremely hard to assess VFM in a pension. Press activity naturally focuses […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    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