View more on these topics

FSCP urges FSA to end commission payments to advisers

The Financial Services Consumer Panel has urged the Financial Services Authority to end commission payments to advisers to avoid future mis-selling scandals.

John Howard, chairman of the FSCP, says: “Establishing a new system of paying for advice could prove to be the most important development in financial services since the FSA was created.”

The FSA is considering the future of commission in the Retail Distribution Review set up at the beginning of 2007, and the results will lead to an FSA Discussion Paper, due to be published shortly.

While the FSCP’s annual report welcomes the FSA’s progress on the move towards more principles based regulation, there are still concerns about how firms will measure up.

This is particularly so with the Treating Customers Fairly principle.

Howard adds: “The industry is being asked to empathise with its customers – a laudable objective but one which may prove to be beyond the grasp of many organisations.”

The FSCP rates the FSA as weak in allowing an increasing amount of industry guidance on its principles, claiming important consumer input may be lost.

It also criticises the FSA’s decision on the Second State Pension, which means that up to 120,000 people may lose out through not being informed of potential mis-selling.

The FSCP is also disappointed that some important consumer safeguards were left out under the regulation of home reversion schemes.

However, the FSCP rated the FSA as very strong in its work on financial capability and in improving its work on consumer communications.

It also said it was strong on dealing with problems in payment protection insurance, mortgage exit administration fees, and client money in general insurance.

It also applauds the FSA for standing up for consumers in the UK implementation process of the Markets in Financial Instruments Directive.

Recommended

Pricing errors see HBOS market share slashed to 8%

HBOS has admitted it got its pricing wrong earlier this year, resulting in its market share plummeting from close to 20% to 8%.Last week, the lending giant iss-ued a pre-close trading statement ahead of its half-year results, in which it revealed that its retention strategy had not delivered the anticipated results. Its mortgage market share […]

Repossessions set to rise, say Moore Blatch

Repossession litigation specialists, Moore Blatch, predict a rise in mortgage repossession claims following the recent further increase in interest rates to 5.5%. Figures recently published by the Department of Constitutional Affairs show that repossession claims and orders have risen by 1% across England and Wales in the first quarter of 2007 since the first quarter […]

Pink extends loans campaign

Pink Home Loans has extended its secured loans commission enhancement campaign until the end of August. Free legals on SPML deals Emhas launched free legals on all Southern Pacific Mortgage Limited sub-prime remortgages across England and Wales. Beacon fills top sales roles Beacon Homeloans has appointed Clive Willson as sales director and Beverley Morris as […]

Unforeseen dangers of weak criteria

I recently attended the Global ABS conference in Barcelona. This year, 4,000 people from all over the world descended on the city to discuss the European securitisation market.

The Perils of Passive Investing

The era of loose monetary policy created an environment that rewarded passive investors in the US. However, with the US raising interest rates for the first time since 2006, Felix Wintle explains why he believes active investing will be more important than ever. In the video Felix discusses: The rising cost of capital and its […]

Newsletter

News and expert analysis straight to your inbox

Sign up