The FSA will take into account calls from the ABI to ban trail commission for IFAs as part of its Retail Distribution Review, but will also consider the views of other industry bodies.
In a leaked document seen by Professional Adviser, IFAonline’s sister title, the Association of British Insurers (ABI) pressed for a ban on the current system of remuneration.
It says the FSA should bring in legislation preventing product providers from paying trail commission to IFAs or multi-ties for investment advice.
The FSA responded by stating the process they were undertaking was an open review and therefore input from bodies such as the ABI would be taken on board.
The ABI criticised the remuneration system in the UK in a draft of a submission it was set to make to the FSA.
It argued a system of customer-agreed remuneration should be brought in for all business which was similar to factory gate pricing.
An ABI spokesman says: “The level of interest and debate created by our thoughts in an early draft of a submission to the FSA Retail Distribution Review shows how important this topic is.
“Part of any discussion about the future of the industry must include potential reforms to the commission model, but any reform must be backed up by evidence and a real assessment of its impact.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Scott Sinclair on 020 7034 2636 or email [email protected]IFAonline
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