26th March 2010
The Consumer Panel welcomed a huge step forward for consumers with the FSA announcement today that ‘adviser charging’ will replace commission for investment advice.
Adam Phillips, Chairman of the Financial Services Consumer Panel said: "At last, the distortion created by commission will be removed from investment advice. The FSA has stuck to its guns, and really has acted to protect consumers and improve the system. Once the new rules are in place, independent advice will have to be truly independent, and not undermined by any commission paid by the product provider.
” We congratulate the FSA on the thorough way in which it has handled the Retail Distribution Review (RDR).
We have advocated the end of commission for many years and we have encouraged the FSA’s work on the whole package of measures developed as part of the RDR.
The Panel has argued for clear labelling of advice so that people know what they are getting. We hope that the new term of ‘restricted’ will make clear the limitations on the range of that advice, and make a clear distinction from independent advice. We would like to see the development of simplified advice as a means of providing mass market access to simple products, and urge the FSA to work with the industry to help achieve this new element in the market.
There is still more work to come from this project on raising professional standards, on how these changes will impact on platforms and the monitoring of compliance with the new rules. We will continue to work with the FSA on these developments.
Notes to editors
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The FSA established the independent Financial Services Consumer Panel in December 1998 to advise its Board on the interests and concerns of consumers and to report on the FSA’s performance in meeting its objectives. The Consumer Panel has statutory status.
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The emphasis of the Panel’s work is on activities that are regulated by the FSA, although it may also look at the impact on consumers of activities outside but related to the FSA’s remit. What we're doing for consumers[1] explains more about the work the Panel is doing.
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The Consumer Panel brings together a wide range of relevant experience. This includes financial services regulation, working with vulnerable consumers, consumer protection, consumer education, front-line money advice, legal expertise, competition policy, public policy analysis, market research and media.
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There are currently thirteen members of the Panel as listed below (for further information on individual members, see Who is on the panel)[2]