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UK commissions ban to drive advisers out of market

Staff Reporter 1 minute read

UK financial planners are gearing up for a ban on commissions by the end of 2012, with many set to leave the industry as a result.

The Financial Services Authority (FSA) yesterday published a consultation paper setting out proposals for the reform of the industry, which is set to take effect at the end of 2012.

Among its recommendations the FSA called for “commission bias” to be removed from the system to ensure recommendations by advisers are not influenced by product providers.

But the changes are expected to drive up to half of financial planners out of the market as a result of the costs of the changes.

Consultancy group Oxera estimated about 20 per cent of firms would exit the business as a result, while life insurer Aviva said the figure would be closer to 50 per cent, The Financial Times reported yesterday.

Back in Australia, the Investment and Financial Services Association and Financial Planning Association of Australia are also moving to cut commission-based payments from financial planning while mortgage broker interest in fee-for-service over commissions-based payments is also gaining momentum.

 

UK commissions ban to drive advisers out of market
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