Treasury select committee member Mark Garnier has called on the FSA to allow grandfathering as part of the retail distribution review and reconsider its ban on commission.
Speaking to Money Marketing at the Conservative conference in Birmingham this week, Garnier branded the qualification requirements for existing advisers as “outrageous” and suggested that experienced advisers should be grandfathered as long as they demonstrate a certain level of knowledge and skills.
He said: “IFAs have been hit by the RDR and they are having to go out and take more exams. even though, in most cases, they are more qualified than the people at the FSA.
“The FSA is not allowing any element of grandfathering and it seems outrageous. I would be very happy for experienced IFAs to be grandfathered as long as they can demonstrate they have a certain level of experience, knowledge and skills.”
He said he supports an overall increase in qualifications for IFAs but it should be phased in over a longer period.
Garnier is Conservative MP for Wyre Forest and was formerly an investment banker who went on to set up his own investment management business. He called for the FSA to look again at introducing a flat rate of commission as an alternative to banning it.
He said: “The FSA should introduce a flat rate of commission across all products. If everyone charged the same amount, it would remove concerns about commission bias and consumers would know exactly how much they were paying, no matter what product they bought.
“People will not pay for advice by the hour. The service IFAs provide to consumers is incredibly important and valuable and I think we continuously interfere with the sector at our peril.”