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TCF could see firms ditch the commission model

Treating customers fairly will be used to force firms to abandon the “merry-go-round” commission model, says the FSA chairman.

Speaking at a Treasury select committee meeting this week, Sir Callum McCarthy said the regulator cannot encourage a change in business model from the sidelines. McCarthy said TCF would be used to make it more difficult for people to use the traditional commission model attacked by McCarthy in Gleneagles without making significant amendments to it.

The FSA chairman warned if firms did not change their current reliance on upfront commission, new entrants will come into the market to take their place.

He said the regulator’s distribution review will be looking to see where FSA regulations are exacerbating the problems he identified in his recent Gleneagles speech.

McCarthy said the regulator’s provider/distributor relationship work was aimed at stopping providers thinking they can be “quarantined” from misselling when offering high commissions to advisers.

FSA chief executive John Tiner told MPs not as many people as he had hoped are paying by fee for advice, and he blamed advisers for not highlighting the fee option properly and said the FSA will “push harder” in this area.

McCarthy said: “We are going to make it more difficult for people to administer the commission in the way it has been administered in the past without recognising their responsibilities.”


‘Retention fees are web of sin’

Edeus managing director Alan Cleary has launched a scathing attack on retention fees, branding them a “web of sin” and insisting they contravene treating customers fairly principles. Cleary says lenders do not have brokers’ best interests at heart and are only out to kill the remortgage market, which could mean considerably less business for brokers […]

Cash ‘sweeteners’ could be taxed

The Government is considering taxing cash “sweeteners” used by trustees to persuade employees to transfer out of final-salary schemes. Peter Askins, a senior off- icial at the Department for Work, is thinking about a range of options to clamp down on the growing trend of firms offering cash ind- ucements to employees to manage down […]

Zurich offering IHT alternative

Zurich has launched a new guaranteed whole-of-life plan, to be marketed as an alternative estate planning tool. The firm says although clients will pay a higher pre-mium for the guaranteed rate than a reviewable rate, it off-ers the peace of mind that many will people need when carrying out their estate planning. The Zurich adaptable […]

Sausage role

A reporter from sister title Employee Benefits found himself in a particularly compromising position in front of a packed-out Hammersmith Apollo last week. The unsuspecting Kiwi was sitting innocently in the third row laughing at a performance of Little Britain Live when he caught the eye of David Walliams or shall we say ex-childrens’ TV […]


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