ABI: MiFID II commission issue still 'one to watch'

The Association of British Insurers (ABI) has suggested European proposals on banning commission for financial advisers may yet have an impact on RDR.

Drafts of the MiFID II legislation detail a ban on commission, but the wording only refers to independent financial advisers.

It led to suggestions restricted advisers may be able to continue taking commission, the FSA has already attempted to quash this speculation.

However, speaking at the Marketforce Future of Distribution in Financial Services conference today, ABI director of life and savings Maggie Craig suggested there may be more movement on the issue.

"There is nothing going on in Europe that is going to be a show stopper for RDR, but they will have an impact," she said.

"We have been assured by the FSA and the European Commission that a commission ban, including tied advisers, in the UK is alright, and that that's not going to be a problem.

"However, I do feel that is one to watch."

Craig was also critical of the FSA for its stance on legacy commission, warning it could pose a consumer detriment if policies are closed to top up or through unnecessary costs and churn.

She also called for further guidance on simplified advice, particularly around the role of facilitators, the requirements for fact finds, and how complaints on the advice delivered would be dealt with by the Financial Ombudsman Service.

Paul Yates, strategy and product development director at Avelo, agreed that there was still too much uncertainty around simplified advice and that this was putting off providers.

He said: "They are finding it very difficult to work, the way it is currently constructed. They are starting to step away from it, saying there are not so sure about it."