Financial advisers in the FSA’s firing line
The FSA has hinted that financial advisers could be forbidden to call themselves “independent” if they earn commission from financial products.
According to the FSA’s review of the sector, commission-based sales could lead to “consumer detriment” shorthand for mis-selling.
One well-known consumer group said: “There is an inherent conflict of interests in commission-based advice which can result in people being sold financial products that are not necessarily right for them.”
The FSA’s report to some extent endorsed this criticism and said: “Product providers often remunerate advisers, and there can be a mis-alignment of advisers’ interests and those of consumers, adding to the risks of consumer detriment.”
David Elms, chief executive of Independent Financial Advice Promotion (IFAP), said: “I welcome the FSA report and measures that ensure there is no conflict of interest between the consumer and the adviser.”