Commission model fails everyone - McCarthy

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Callum McCarthy has criticised the commission-based business model used by life companies and IFAs, suggesting it can lead to "inappropriate advisory activities".

Speaking at the Gleneagles Savings and Pensions Industry Leaders’ Summit, the chairman of the Financial Services Authority (FSA) warned the present system fails providers, customers and even to some extent intermediaries. In his speech: -Is the present business model bust?’ - McCarthy points out the current system is subject to a large amount of ‘churn’ where the volume of transfers between provider firms in the pensions market amount to about half of new single premium personal pensions business. He says the large number of transfers “can give a false impression of how much actual ne...

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