Questions over use of commission under MiFID

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IFAs have been warned implementation of an EU directive next year could require financial advisers to work harder to prove commission remuneration enhances the service offered to consumers and should not be considered an inducement from providers.

Speaking at the FSA’s MiFID conference in London yesterday, Philip Warland, senior adviser at PricewaterhouseCoopers, said distributors of retail financial services products will be affected more than providers by the EU’s Markets in Financial Instruments Directive (MiFID) when implemented, yet IFAs are still “largely in denial” about its impact and “wish it would go away”. More specifically, he alleges it could bring into question whether commission paid to IFAs by provider firms should be considered an inducement of business from investment firms, but intermediaries have so far failed t...

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