View more on these topics

Mifid could block commission ban

Aifa believes the FSA’s retail distribution review plans to ban certain types of adviser from receiving commission payments could be scuttled by the European Commission.

Director general Chris Cummings says he expects the FSA to face difficulties in getting the structural changes advocated in the RDR to be accepted by the EC under the markets in financial instruments directive.

He says Mifid creates freedom of services across the European Union and allows intermediaries to be paid by commission, without specifying type, so the FSA is likely to need Article 4 exceptions to drive through the policy.

He says through Mifid, the EC has already taken a view that commission does not lead to consumer detriment. Following the FSA’s failure to get these exemptions for the payment menu and initial disclosure documents, Cummings says that there are massive doubts as to whether the regulator would get its way as EC objectives potentially conflict with the RDR.

In one of his last speeches at the FSA, chief executive John Tiner warned: “The European Commission has objectives that differ from those of regulators.”

Cummings says the RDR follows a similar timetable to the EC’s green paper on retail financial services in the single market, with a final report published this autumn and conclusions still unknown.

Aifa has mapped out a three-stage RDR response programme starting by consulting members, engaging with consumers and conducting independent research. This will be followed by policy formation focusing on ben-efiting consumers and finally lobbying across the political and regulatory spectrum.

Cummings says: “We must ask the FSA again and again do you have the power? It is no longer the final arbiter. How do we know we are not going to waste a whole lot of time, effort and money and confuse consumers further to come up with proposals the EC will not allow because the commission is going in a very different direction?”

In the RDR paper, the FSA acknowledges that Mifid “may have the greatest potential impact on implementing the proposals”.

It also says: “We are fully prepared to make cases where necessary to achieve the outcomes of the review.” It also hopes primary advice will fall outside the Mifid scope, as basic advice does.

Cummings hits out at ABI, p5


Life cover 30 per cent cheaper than 10 years ago says Standard Life

Life insurance is on average 30 per cent cheaper than 10 years ago according to Standard Life.For example, a 40 year old man who does not smoke would have paid £25.11 per month in October 1997 for £100,000 of cover over 25 years with Standard Life. But today he would pay £14.42 per month for […]

NU fallout continues as bond chief quits

Norwich Union has lost another high-profile fund manager after Donna Cabral quit as manager of its £921m corporate bond fund just three weeks into the role.Her departure follows the loss of three senior members of NU’s property team to Aegon earlier this month and bond fund manager Mark Gull to Pension Insurance Corporate.Roger Webb, who […]

School of thought on lender performances

As schools break up for the summer holidays, Robert Sterling managing director Kevin Duffy assesses the lenders which show promise and the others who must do better in his end-of-term school report

The thrill of the Chase for Phil

Congratulations to Phil Wicks, who became the fastest financial professional in the history of the JP Morgan Chase Corporate Challenge on July 12. The claims administrator from Legal & General ran 3.5 miles around Battersea Park in 16 minutes 45 seconds. The 23-year-old was joined by nearly 13,000 other participants from 302 companies in the […]


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