Julian Knight: Advisers must not get extra time to fill their boots at our expense

I've always hated the payment of commissions to financial advisers. Human nature being what it is, advisers are going to be swayed if they have a choice of recommending one product paying little or nothing over another offering a bumper upfront commission.

Every mis-selling scandal I have come across in my 12-year career has advisers' commission at its root. As we reveal on pages 90 and 91, the "epidemic" in the mis-selling of investment bonds (the word bond, with its connotations of safety, is often used to disguise a product which has little security) is fuelled by commissions, with providers telling advisers "look what you can earn if you sell our bonds".

On Friday, the Financial Services Authority published its final rules on how products should be sold, confirming that commission will be scrapped from the end of 2012. The excuse that has always been trotted out is that if commissions were banned and advice became chargeable fewer people would seek help with finance. I'm glad that, nine years into its life, the FSA has finally recognised this to be bunkum. If the price of advice is being mis-sold a duff product then perhaps people are best keeping their money in a savings account or with one of National Savings' index-linked products – or even under the mattress.

But having to wait until the end of 2012, leaves the industry and unscrupulous advisers more than two years to make hay. Some providers are paying commissions of 6, 8 or, in one case recently exposed by The Independent, 10 per cent to advisers. Providers know commission gets advisers to herd their clients to them, and that, once signed-up, investors are too nervy or too passive to move their money. As a result, commission's last gasp could lead to massive mis-selling, instead of an orderly winding down of the whole grotty business. The FSA says it is taking a more interventionist stance, so here is a test: examine the offered commissions and stop the providers' land grab and excessive payments.

Darling's ace

A "blatantly political Budget" was one jibe (when are Budgets anything else?) another was that there was nothing in it. Well what did people expect? The next Budget, probably very soon after the election, will be the real barnstormer (unless there's a hung parliament). What the Budget confirmed is that Alistair Darling – this quietly spoken man-badger amalgam – is Labour's ace in the pack. He is surefooted, seems to genuinely like ISAs (which are now being up-rated with inflation) and has a gravitas that George Osborne can only dream of.

What I like about Darling is that he isn't Gordon Brown. What you see seems to be what you get, unlike his predecessor who buried nasties in double speak and obfuscation with almost religious zeal. It's rather nice to have a Chancellor who respects that the Budget should be a relatively open exposition of tax-and-spend policies – although Darling can't be too honest until after the election – he is still a politician. It's a pity that if Labour is re-elected he is likely to be replaced by Brown-lite Schools Secretary Ed Balls.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Suggested Topics
PROMOTED VIDEO
Life and Style
fashionHealth concerns and 'pornified' perceptions have made women more conscious at the beach
Arts and Entertainment
tv
Sport
Ojo Onaolapo celebrates winning the bronze medal
commonwealth games
Arts and Entertainment
Rock band Led Zeppelin in the early 1970s
musicLed Zeppelin to release alternative Stairway To Heaven after 43 years
Arts and Entertainment
High-flyer: Chris Pratt in 'Guardians of the Galaxy'
filmHe was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
Sport
Van Gaal said that his challenge in taking over Bobby Robson's Barcelona team in 1993 has been easier than the task of resurrecting the current United side
footballA colourful discussion on tactics, the merits of the English footballer and rebuilding Manchester United
Life and Style
Sainsbury's could roll the lorries out across its whole fleet if they are successful
tech
Travel
The shipping news: a typical Snoozebox construction
travelSpending the night in a shipping container doesn't sound appealing, but mobile crash pads are popping up at the summer's biggest events
Arts and Entertainment
'Old Fashioned' will be a different kind of love story to '50 Shades'
film
Arts and Entertainment
Tracey Emin's 'My Bed' is returning to the Tate more than 15 years after it first caused shockwaves at the gallery
artTracey Emin's bed returns to the Tate after record sale
Arts and Entertainment
Smart mover: Peter Bazalgette
filmHow live cinema screenings can boost arts audiences
Environment
Neil Young performing at Hyde Park, London, earlier this month
environment
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Project Manager (HR)- Bristol - Upto £400 p/day

    £350 - £400 per annum + competitive: Orgtel: Project Manager (specializing in ...

    Graduate / Trainee Recruitment Consultant - IT

    £25000 per annum + OTE £40,000: SThree: Orgtel are seeking Graduate Trainee Re...

    HR Business Partner - Banking Finance - Brentwood - £45K

    £45000 per annum + Benefits: Ashdown Group: ** HR Business Partner - Senior H...

    PA / Team Secretary - Wimbledon

    £28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...

    Day In a Page

    Save the tiger: The animals bred for bones on China’s tiger farms

    The animals bred for bones on China’s tiger farms

    The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
    A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

    A former custard factory, a Midlands bog and a Leeds cemetery

    Introducing the top 50 hidden spots in Britain
    Ebola epidemic: Plagued by fear

    Ebola epidemic: Plagued by fear

    How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
    Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

    From 'Parks and Recreation' to 'Guardians of the Galaxy'

    He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
    How live cinema screenings can boost arts audiences

    How live cinema screenings can boost arts audiences

    Broadcasting plays and exhibitions to cinemas is a sure-fire box office smash
    Shipping container hotels: Pop-up hotels filling a niche

    Pop-up hotels filling a niche

    Spending the night in a shipping container doesn't sound appealing, but these mobile crash pads are popping up at the summer's biggest events
    Native American headdresses are not fashion accessories

    Feather dust-up

    A Canadian festival has banned Native American headwear. Haven't we been here before?
    Boris Johnson's war on diesel

    Boris Johnson's war on diesel

    11m cars here run on diesel. It's seen as a greener alternative to unleaded petrol. So why is London's mayor on a crusade against the black pump?
    5 best waterproof cameras

    Splash and flash: 5 best waterproof cameras

    Don't let water stop you taking snaps with one of these machines that will take you from the sand to meters deep
    Louis van Gaal interview: Manchester United manager discusses tactics and rebuilding after the David Moyes era

    Louis van Gaal interview

    Manchester United manager discusses tactics and rebuilding after the David Moyes era
    Will Gore: The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series

    Will Gore: Outside Edge

    The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series
    The children were playing in the street with toy guns. The air strikes were tragically real

    The air strikes were tragically real

    The children were playing in the street with toy guns
    Boozy, ignorant, intolerant, but very polite – The British, as others see us

    Britain as others see us

    Boozy, ignorant, intolerant, but very polite
    How did our legends really begin?

    How did our legends really begin?

    Applying the theory of evolution to the world's many mythologies
    Watch out: Lambrusco is back on the menu

    Lambrusco is back on the menu

    Naff Seventies corner-shop staple is this year's Aperol Spritz