The UK financial watchdog is considering the return of commission payments for selling certain retail products and has denied that its approach has become “soft” on the banks.
Tracey McDermott, the acting chief executive of the Financial Conduct Authority, said on Saturday that it was examining the possibility that commission payments be allowed once again for certain investment or pension products.
Commission payments to advisers for selling products were banned under the Retail Distribution Review in 2013 to help stamp out widespread mis-selling and to protect consumers.
Speaking on BBC radio’s Money Box programme on Saturday, Ms McDermott said: “We do not want to go back to a world where we had the problems of the pre retail distribution review, what we do want to look at is actually what is the best way of delivering advice and guidance across the market so I wouldn’t rule out that there may be some element of commission, but we are not going to reverse the retail distribution review.”
The watchdog is currently undertaking a review of financial advice and has received a number of responses, with some suggesting that products with commission are reintroduced.
Her comments come in the same week it emerged the watchdog had dropped a review into retail investment advice and the payment of inducements. [...]
But the watchdog’s controversial decision to ditch its probe into UK banking culture in the past two weeks has led to claims that it is easing off on “banker bashing”, in spite of the multibillion pound fines for rate-rigging and mis-selling of financial products.
Ms McDermott has defended her decision. She said: “Nothing could be further than the truth. We are not going soft on the banks.” [...]
The Treasury select committee will question Ms McDermott and the watchdog’s chairman, John Griffith-Jones, later this month on its decision to drop the bank culture review.
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