There is little appetite for a ban on commission for financial advice in continental Europe, with the ‘advice gap’ created the UK Retail Distribution Review being cited as one reason for sticking with the status quo.
The issue was discussed at a recent conference organised by the European Federation of Financial Advisers and Intermediaries, with deputy chairman Johannes Muschik stating that the lack of appetite for a commission ban was echoed across all stakeholder groups.
“The creation or expansion of the ‘advice gap’ in the UK is seen as being a direct result of the recent regulatory changes under RDR, not least the removal of commission.
“It was felt by attendees that such a ban could be disastrous if implemented across Europe, particularly for consumers, many of whom could become disenfranchised from advice.”
The main conclusion of the conference however, was that regulation must benefit consumers not exclude them.
Paul Stanfield, general secretary of FECIF, said that this echoes the views of Gabriel Bernadino, the head of the European Insurance and Occupational Pensions Authority.
“Earlier in the year Gabriel declared that we needed better not more regulation. The views expressed at our conference seemed to show considerable agreement with that approach, from all relevant stakeholders – not least consumers.”
David Charlet, chairman of FECIF, also revealed that the results of a wide-ranging pan-European study were due to be published “fairly early” in 2015, teasing delegates with “some interesting trends” that have already emerged.
In August, asset managers attacked proposed European regulations aimed at banning the practice of paying for research with dealing commissions.
The proposal from the European Securities and Markets Association aims to stop them using commissions from buying stocks and bonds to pay for research from external firms.
But asset management firms said they may lead to poorer returns for investors and significant damage to small and medium-sized enterprises.
peter.walker@ft.com
