View more on these topics

Leave us to best serve our clients

The FSA is trying everything possible to stop IFAs from trading. Its latest wheeze is to stop all commission.

If it stops commission, what then? It will disadvantage the public, the vast majority of whom choose to pay advisers through commission, not least because it is easier and to their advantage to do so.

It is just as possible for dishonest advisers to skew fees as take inflated commission payments.

If the FSA wants the banks to look after the public, is this because of their exemplary past track record in such areas? The FSA has a very short memory of the financial services misselling culprits.

What will happen to all the commission that the ABI members will be saving? Any bets on it going to our clients rather than their shareholders? I think not.

What will happen to the existing trail? This is paid by dint of a legal contract and cannot be stopped arbitrarily by the FSA. Why is the FSA even getting involved with this? It is there to regulate and, as far as I am aware, does not have the remit to decide how much advisers are remunerated and to ride roughshod over what is meant to be a competitive environment. After all, that is why the MCA was abolished.

If it is concerned about unscrupulous advisers, why not bring back the MCA? It will, of course, understand that this, in turn, will yet again disadvantage the public, as the honest adviser cannot use the “excess” commission to enhance their client’s investments.

So what happens if commission is axed? The public will have to pay for advice by way of fees, which means fewer people will seek advice in the first place. There will be fewer IFAs about so the banks will be able to take full advantage of a public without the benefit of independent advice, so yet another misselling scandal will occur in due course.

Not being philanthropic organisations, the ABI members will pocket the savings they make by not having to pay commission.

As an aside, it always amazes me that the banking fraternity and, for that matter, the regulators, earn huge sums of money and massive bonuses without the regulator saying this is wrong.

The reason always trotted out is that they are earning a competitive income for what they do. Yet the regulator will not leave us alone. Why? The FSA must stop this nonsense before it is too late. Regulate the dishonest adviser and leave the rest of us alone to serve our clients through independent advice.

David Barnett
DBF Independent Financial Services


Life cover lost in the paper chase

So-called simple online applications for life insurance can generate as much as 29 metres of paperwork.Torquil Clark Life Insurance director Jason King wanted to compare the consumer experience for buying life cover and mobile phone insurance after he was offered mobile insurance at £5 a month.He found £5 a month would buy him, a 36-year-old […]

‘Life offices misleading with advertised rates’

Torquil Clark director Jason King claims that life companies are not treating customers fairly by having standard rates that almost half of applicants cannot qualify for.He said the number of critical-illness applications that are rated has doubled in the past five years and believes insurers who advertise a standard rate are misleading consumers.He said: “Over […]

Tranter fears NU’s critical-illness amnesty may backfire

Sesame product manager Dale Tranter says Norwich Union could be shooting itself in the foot by encouraging critical-illness policyholders to admit any non-disclosure on their applications.He says the action is well meant but it would only take an increase in one policyholder’s premium to taint the reputation of NU and the whole industry.Tranter says: “NU […]

Skandia’s paid critical illness claims up

Skandia paid 89 per cent of critical illness claims in the year to June 2007, up one percent from the previous year.Two per cent were declined due to non-disclosure and 9 per cent were declined because the claim had not met the definition.Cancer remained the most commonly claimed for condition, accounting for 51 per cent […]

2015: a divergence in economic policy?

As the US continues to confound growth expectations and the eurozone’s ‘will they, won’t they’ saga has finally concluded, what are the implications for global markets? James Dowey, Neptune’s chief economist, puts forward his outlook for 2015 and the key considerations for investors.


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