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FSA set to abolish commission for IFAs

The Financial Services Authority (FSA) has released proposals for a total revamp of the UK financial sector. The proposals will see commission payments outlawed between independent financial advisers and investment management companies and instead see customers paying fees upfront or out of their investment funds.

The idea behind the proposed change by the FSA is to inject more confidence into the UK market and reduce any potential bias on behalf of IFAs. The fact that there are already various questionnaires, documentation and an overall agreement required between any parties investing in any investment vehicle appears to have been overlooked. The initial proposals appear to have gone too far in the eyes of many people and there is real fear that London could lose its place at the top table of financial markets around the world.

In what many see as "throwing the baby out with the bathwater" there is a feeling that the FSA, under severe pressure from the UK government, has overstepped the mark and could substantially compromise the competitiveness of the UK financial market. Whether these proposals will actually become law remains to be seen but there are a significant number of IFAs this evening recalculating their income potential for the future.

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