FI: “Prohibit commission on all financial advice” – Swedish Dagbladet

The background of FI position the Securities Market Commission tabled at the end of January.

In its response to the government writes FI information on financial services is inadequate and that the industry provides advice that is not in the interest of the consumer.

“Because FI wants to see a ban commissions covering all financial advice, no matter what kind of company that performs advice. To ensure that the advice that consumers are actually controlled by what they do, and not what the sellers benefit most, it is important that the system of commissions is prohibited by law, “writes FI in response to the submission.

Financial Supervisory Authority’s consultation response published while authority report “Consumer protection in the financial market”. It notes the inspection consumer protection in the financial market need to be strengthened.

“One such area is financial advice … FI in its supervision have seen major shortcomings in how companies deal with the conflicts of interest that arise when financial advice is largely financed by commissions. FI therefore considers that the current rules are not sufficient to provide consumer protection and believes that a commission ban should be imposed, “writes the inspection.

FI mentions specifically conflicts of interest that arise when the commission schemes encourage advisers to recommend expensive savings products especially cheap.

“Given that many consumers have a simple savings needs should an advisor who looks to the consumer’s best to propose an inexpensive product over expensive if both can be considered appropriate. However, this assumes that companies can manage their conflicts of interest, and based on what is best for the consumer, “writes FI.

The Inspectorate also highlights that consumers are often in knowledge underdog against a financial advisor. FI has completed a study showing that many consumers lack knowledge about basic financial concepts, which is described as “a real problem among Swedish consumers.”

“In telephone interviews with more than 800 people aged 25-75 years questions were asked about the rate of savings, the effects of inflation and financial risk and spread risk. Only just over half of those surveyed answered correctly to the three questions, “writes FI.