Tracey McDermott: FCA considering return of commission

McDermott: 'I wouldn't rule it out but we will not reverse RDR'

Jenna Towler
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Tracey McDermott: FCA considering return of commission

The Financial Conduct Authority (FCA) is considering bringing commission payments back in a limited form for certain retail products.

Acting chief executive Tracey McDermott told BBC's Money Box programme that while the watchdog did not want to overturn the Retail Distribution Review (RDR) it was looking at its outright ban on commission linked to investment products.

Speaking on Saturday, she said: "We do not want to go back to a world where we had the problems of the pre-RDR, what we do want to look at is actually what is the best way of delivering advice and guidance across the market so I wouldn't rule out that there may be some element of commission, but we are not going to reverse the RDR."

RDR banned commission payments to financial advisers (except for protection policy sales) in a bid to stop widespread mis-selling.

Several responses to the Financial Advice Market Review (FAMR), a joint FCA and Treasury investigation into the accessibility of financial advice, have suggested a return to commission in a limited form.

McDermott said the FAMR had received 290 responses and the regulator would examine all recommendations, including a return to commission.

An announcement on the review is due to be made close to or in the March Budget.

Banks

McDermott also said the FCA had not "gone soft" on the banks, despite shelving an inquiry into banking culture in December.

Speaking to the BBC, she said: "We're not going soft on the banks, we're not being told what to do by the government.

"We have objectives which are set for us by parliament and statute, and we are determined to deliver on those."

Last week, the FCA confirmed McDermott had ruled herself out of becoming the regulator's chief executive. The search for a replacement for Martin Wheatley is ongoing.

Further reading 

Tracey McDermott rules herself out of FCA leadership race

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