The FSA understands perfectly well that the commission-based model for selling long-term savings products to the public is deeply flawed. In a recent speech to industry leaders, Chairman Sir Callum McCarthy spelt it out. The regulator’s powers do not extend to forcing changes in the business model.

It has tried incentives to change, such as the ‘Keyfacts’ disclosures and the ‘Menu’ IFAs have to use, but these have had no impact on bias – exactly as precicted in my original article on commissions. It has a principles-based ‘Treating Customers Fairly’ regime, but this too has limited powers to deal with so subtle a problem. If you have any doubts about the harm commissions do, read what Sir Callum had to say at Gleneagles this month. If you’re looking for signs of robust action to promote regime change: read it to see that they simply are not there.

If you want advice characterised by intellectual and financial independence, you have to be willing to write the cheque and your adviser confident enough to live by asking for cheques. If commissions are available that would otherwise go to waste, take them – but they are icing on the cake, not the basis on which you pay. When you get this distinction, you will be able to help yourself better.

TAGS: Commissions, fees, independence