The FSA has proposed that independent financial advisers should operate a 'defined payment' method of charging their customers.
Following a lengthy consultation process, the FSA has decided that best practice could be achived by developing a 'Menu' approach.
The 'Menu' will be provided to consumers in the early stages of the sales process. The FSA wants it to include:
·An outline of the services the adviser is offering.
·The option of paying by fee and a fee scale.
·The option of paying by commission and, for a range of popular products, the commission that the adviser normally charges, set alongside average rates charged in the market.
David Severn, Head of Retail Projects at the FSA, said: "We want to help consumers be more confident about the advice they are receiving, to know what they're getting for their money and compare one adviser with another.
"Some constructive proposals came forward in the responses to CP121 and, of those, the 'Menu' option offers the best route for us to achieve our objectives. Importantly, it will ensure that the form and level of adviser remuneration - and scope for negotiation - is signalled to the consumer `up front'."
