Explained: The reason (some) advisers can't resist the lure of commission

Cynics regularly posit that commission and integrity can not co-exist when it comes to recommending products. Indeed, a handful of so-called 'new model' advisers claim commission-based IFAs are, in some cases at least, knowingly ripping off consumers. However, a working paper by Keith Redhead, an academic from Coventry Business School, claims that, however well-intentioned advisers are, they will never be able to resist the lure of big commissions. Redhead's paper, which will soon appear in the Journal of Financial Services Professionals, argues advisers are unable to tell if they ...