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Tenet wants to axe the payment menu

The Tenet Group is calling for the payment menu to be scrapped because it says it is failing to help consumers compare prices.

The network considers that expressing cost as a reduction in yield rather than as commission would provide a more transparent and readily understandable remuneration method.

Chief executive Simon Hudson says because the menu, which was introduced with depolarisation last June, is neither transparent nor clear, it flouts the principles of the regulator’s treating customers fairly regime.

Hudson says the commission level expressed to the consumer is paid by the provider not the consumer, which results in confusion.

He says using reduction in yield would bring the focus back to value, which is of more interest to consumers and would enable like-for-like comparisons.

Hudson says: “If we want to win back consumer trust and reduce the growing cynicism about financial services while enabling commercial competition based on cost of delivery, we are going to have to try a lot harder to demonstrate both how we are paid and the value of what we do in a way that consumers can understand.

“We as a group will continue to lobby for a yield-based system for the benefit of consumer and adviser.”

The FSA says, as part of its wider consultation into Mifid in October, it will be consulting on the impact of depolarisation and its initial disclosure documents. But the regulator is proposing to maintain the menu and the IDD while it continues to undertake the post-implementation review of Mifid.

Spokeswoman Sam Bennett says: “We did carry out a full consultation on the menu before it was introduced asking for feedback from the industry. The result was in line with the outcome of this consultation.”

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