FCA 'to widen commission ban'

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The Financial Conduct Authority (FCA) will lay down a marker to the financial services industry by widening the scope of the incoming commission ban on retail investment sales, according to a report in The Independent.

According to the paper, Martin Wheatley - who will become chief of the FCA when it takes control of financial regulation next spring - will use his first major speech to the City to outline a tougher approach to regulation.

He will say the new watchdog will seek to avoid commission-driven mis-selling scandals, such as that surrounding payment protection insurance (PPI).

Part of the move will involve widening the clampdown on commissions to all financial products, not just investment-related sales.

Rules set to be introduced at the end of the year following the Retail Distribution Review (RDR) will outlaw the payment of commission from providers to financial advisers on retail investment product sales.

But Wheatley's plans, according to The Independent, will affect the sale of insurance policies, mortgages, as well as more basic financial products such as current accounts and credit cards.

However, the new crackdown will not ban commission altogether. Instead it will allow schemes that meet certain restrictions.

He is due to warn banks, insurers and building societies, as well as investment firms, that they must co-operate with the new regulator and remove commissions from the centre of their sales culture.

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