FCA motor finance redress scheme: Just the tip of the commission iceberg?
Commenting as the FCA is set to announce its proposed redress scheme for consumers impacted by motor finance discretionary commission arrangements, Zoe Morton, Financial Services Director, RSM UK said: “This may be the tip of the iceberg when it comes to compensation for consumers for discretionary commissions. Such commission arrangements expand beyond motor finance into other areas of financial services, including insurance and financial advice. We expect to see the regulator examining other areas where commission structures may result in foreseeable harm to customers, especially if they haven’t been clearly communicated.
“Today’s redress scheme announcement confirms that scrutiny of commission schemes to ensure fair customer outcomes is still very much a focus for the regulator. It’s vital that firms reflect on today’s news and consider whether other commission arrangements are clearly disclosed and operating in the customer’s best interest.
“In a world where commission can help motivate markets to work together and expand access to credit, insurance and investment products, it’s important to balance this with transparency, clear disclosure and consideration of customer outcomes, in line with the FCA’s Consumer Duty.”