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The commission mission is to show the low points

Consumers think commission is too high, according to the Financial Services Consumer Panel, while many IFAs argue commission on some products is too low.

These views are not irreconcilable.

To deal with consumers first. In stark monetary terms, commission can take a sizeable chunk out of a product.

In advisers&#39 defence, distribution is a necessary cost, not an optional extra.IFAs suffer partly because this cost is more visible than in other industries.

As for the inevitable accusations of commission bias, we would point to the work of London Economics on polarisation which said this was not a problem.At least this view was based on research, contrasting with the anecdotal remarks in the Myners report.

But there is clear moral hazard between some high-commission investments and price-capped stakeholder and Isas and their ilk. Commission may be too high on some products and many IFAs rebate cash but it is too low on other products.

IFAs can mount a two-pronged defence. The first at national level is to convince politicians that advice is often essential and that over-zealous cost control will deny it to those who need it most.

The second at customer level is to convince the public that good advice is worth paying for as disclosure is revised.

But before the FSA or Government consider some sort of commission crackdown, those who genuinely understand the issue, say Alistair Darling&#39s reorganised department for Work and Pensions, should accept that commission can also be too low.


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