In a further sign of the sweeping
regulatory changes taking place in the UK, the country’s regulator,
the Financial Services Authority (FSA), is planning to ban
financial advisers, including those working for retail banks, from
receiving commissions for selling investment products, in an
attempt to ensure recommendations made by advisers are not
influenced by product providers.
The FSA said in a consultation document on its
Retail Distribution Review (RDR) – which it released initially at
the end of last year – that commissions would be replaced by
upfront fees, either paid directly by the client or taken from his
or her investment.
“The RDR is about regaining consumer trust and
confidence in the retail investment market, building a more
sustainable sector and making it easier for people to find their
way around and get the help they need – this is more important now
than ever before,” said Jon Pain, FSA managing director of retail
markets.