Product providers might be willing to reduce the amount of commission paid to financial advisers on ...
Product providers might be willing to reduce the amount of commission paid to financial advisers on some products if it can be proven there is bias towards higher commission carrying products, suggests Standard Life.
Commenting on the Sandler report published yesterday, Ronnie Taylor, head of strategy and operations for IFA sales at Standard Life, says the industry would prefer to change its commission payments to improve the level playing field and dispel suggestions of bias towards higher commission products, if there was sufficient evidence to say IFAs were only buying certain products because they carry higher commission.
"Some recommended systems [of remuneration] are accepted as workable, some areas of investment are seen as carrying potential bias because of the commission attached, but this is an issue that the providers could address through the commission system," says Taylor.
"There is a move towards a greater clarity of disclosure and comparative disclosure. But rather than apply standards across the industry, it would be better to address the route problems and fix those.
If there are pockets of [commission] bias it is probably something the industry would be prepared to address."
Taylor's comments follow those in Sandler's report, which suggest Sandler's idea for a commission rebate system would "make it much more difficult for commission bias to operate … if advisers had sought to charge a higher fee for selling one product rather than another".
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