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New upfront advice fees to shake up investment market?

Published on 26 Mar 2010 under category: legal

Consumers are to be given clear information upfront about the cost and nature of financial advice services, under new guidelines from the industry watchdog.

The Financial Services Authority (FSA) has today (March 26th) published the new rules which aim to root out commission bias, which can often lead to poor advice and charges of professional negligence.

Those buying services upfront should be able to negotiate a more suitable payment programme with firms, in order to be able to access services.

Companies will no longer be able to accept commission in return for recommending specific products, while those firms that only deal in a limited range of products will have to make that clear to customers.

Firms claiming to give independent advice will have to prove that they have surveyed the market fully and that the products they select are appropriate for their clients.

On the new rules, PricewaterhouseCoopers said that the upfront fees are likely to mean that consumers gravitate towards new financial product retailers on the market, including the new high street brands in the sector.

Pat Newberry, chairman of PricewaterhouseCoopers LLP, commented: "By stripping away hidden commission structures and providing greater transparency about what investors are paying for, the Retail Distribution Review will help pave the way for a market where products are at last bought rather than sold."

If you require advice on Professional Negligence please call us on +44 (0)20 7831 0101 and ask for Peter Mellett.










If you require advice on Professional Negligence please call us on +44 (0)20 7831 0101 and ask for Peter Mellett.