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Practitioner panel defends commission at FSA APM

The regulator’s Practitioner Panel has told the FSA’s annual public meeting that it has seen no proper or reliable evidence of commission bias and called for consumers to be allowed the choice of fees or commission.

Chairman Roy Leighton told the meeting in London that it was universally taken for granted that commission based remuneration leads to bias.

While accepting the need for a review he called for it to be worked through in a logical progression with which the industry can cope.

He also argued that while customer agreed remuneration has merits much more thought would needs to be given as to how it operates in practice.

He also criticised Consumer Panel chairman John Howard’s views about commission.

He said: “I hear what John Howard says about commission but I would argue that one cannot be that unequivocal that all commission is wrong. It seems universally taken for granted that all commission based remuneration leads to commission bias. However the panel has not seen any proper or reliable evidence of this. We believe that issue is not about commission per se but about raising standards within the retail industry.”

“Life’s experience is that people don’t like fees – mortgages are onerous and the consumer’s attitude to fees is pretty negative other than for the wealthy. Let’s give the consumer choice.”

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