UK financial regulator to ban commissions

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29 June 2009

The plan by the Financial Planning Association (FPA) to move members away from commissions to fees is appearing more logical week by week. Now the UK Financial Services Authority has announced it will ban commissions for financial advisers.

The FPA has been trying to gain support for its proposal to move towards a fee-based pay system by 2012.

CEO Jo-Anne Bloch told insuranceNEWS.com.au the association has been aware of the UK regulator’s proposals since it released a consultation paper last November.

“Australia’s most aligned financial advice and regulatory system is in the UK, and they too have confirmed plans to move away from commissions,” she said. “The FPA’s proposals are becoming very familiar, even globally.”

The FSA last week issued a consultation paper detailing proposals to ban payments to advisers from fund managers and life insurers. The changes will take effect from the end of 2012.

UK industry media reports say thousands of independent financial advisers are expected to leave the industry as a result of the planned commission ban.