Should financial advisors take commissions on the products they sell? No, according to the European Consumer Organization (BEUC) which launched a campaign in 2018, The price of bad advice – “The price of bad advice”, which will continue until the end of 2020.
As part of the initiative, relaunched in Italy by Consultique, an independent consultancy firm, the European association has collected and analyzed the major financial scandals that exploded in recent years in Europe. According to BEUC, at the basis of many of them and the consequent damages suffered by savers there are "inadequate financial advice” often provided on the basis of the commissions guaranteed to the consultants by the individual products and not on the basis of the needs of the clients.
In an article titled “Commissions have been a central factor behind many recent financial advisory mis-selling scandals,” BEUC explains that financial advisors would be encouraged to distribute higher cost investment products to savers that guarantee a higher commission, discarding tools that instead give access to more negligible remunerations.
Based on these considerations, "to ensure that the financial advice offered to clients meets their needs, commission payments should be prohibited on investment products and complex financial products throughout Europe”, proposes BEUC.
In recent years, several governments in Europe have already banned the payment of fees to financial advisors and set limits resulting from making fees transparent in products in the fight against conflicts of interest. These include the UK and the Netherlands, which banned them in 2013.
In Italy, to date, there is no ban on commissions of any kind, which indeed represent a widespread method for the remuneration of bank and network consultants. However, it is completely different for independent consultants, who do not sell any financial products. From 2018 December XNUMX, Consultique reports, the OCF register was born which also includes independent financial advisors who, not being linked to banks and networks, do not receive commissions on the products they sell, but are paid "by fee", respecting so the characteristics described by BEUC.
