The FSA has today released controversial proposals regarding the UK investment market and how independent financial advisers will be remunerated in the future. The old commission-based system which has been in place for many years is now under threat with the FSA looking to introduce a system whereby investors will pay upfront fees out of their own pocket with regards to commissions and financial advice. Will this really make a difference?

The FSA, by introducing these proposals, appears to be suggesting that the independent nature of many financial advisers is questionable. Despite the fact that millions of pounds have been spent educating financial advisers, introducing a new regulatory system and funding regular compliance visits there appears to have been in a sudden about turn. The vast majority of independent IFAs operate in a manner which is both beneficial to the customer, themselves and the market as a whole although the suggestions from the FSA would indicate they believe otherwise.

At the end of the day what IFA in their right mind would recommend a particular investment because of the incentive in commissions themselves when they know the customer would not come back if the performance was poor. There are many sides to this particular argument which is set to go on for some time to come.

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