Sunday, December 19, 2010

UK to ban commission on investment products (i.e. life insurance policies) from 2012

Read this article:
http://news.bbc.co.uk/2/hi/business/8589042.stm

The UK Financial Service Authority found so much abuse with the sale of life insurance policies by commission based agents that they gave up trying to enforce ethics on them.

6 comments:

zhummmeng said...

Australia will ban in mid year 2011.
Also entry to the profession is a degree in financial studies.
New Zealand is tightening the rules first to see if banning commission is necessary.The insurance agents are already up in arms over these new requirements.
Hong Kong and Malaysia should follow suit.
What about Singapore, the aspiring financial hub? It should because malpractices are getting out of control and many of the agents are still option 3 product peddling salesmen and women who try to pass off as financial consultants to cheat the unwary consumers.
Surprisingly, India has started since 2009 some reforms including banning commission.

Lye Khuen Way said...

Just maybe with the GE coming up, MAS may also announce a similar rule or two ! We aim to be Financial Hub, no ?

Tan Kin Lian said...

The insurance agents are up in arms against the ban on commission, because it is their livelihood.

But the regulators in these countries have the courage to make a stand and protect the consumers from the unscrupulous agents. I admire their courage. (Not all agents are unscrupulous, but there are many who are - and they are bleeding the consumers).

Spur said...

Unlikely for S'pore to ban commissions for financial sales due to strong lobbying by financial industry and linkages with GLCs and TLCs --- too many vested interests. Also will contribute to more unemployment as at least 50% will not survive in a fees-only environment.

Just look at property agents --- it took the govt many decades to decide to simply "register" them, even though such a move doesn't affect the profits of big property developers and govt-linked companies like CDL and KepLand. At most maybe make the life of property agencies slightly more troublesome by 10% or 20%. Govt only made this cosmetic move after property became such a hot political potato in the last 2-3 years.

Vitali said...

Small correction: looks life insurance will not be affected.

Quote:

The new policy will apply to the sale of investments such as pensions, annuities and unit trusts but not to mortgages and insurance policies.

Tan Kin Lian said...

The insurance policies that are exempted are explained below, i.e.
"pure protection" policies, such as life and health insurance, can still be sold on a commission basis.

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