In a strongly worded letter to Michel Barnier, European Commissioner for Internal Market and Services at the EC, the chairman of the Fédération Europpéene des Conseils et Intermédiaries Financiers (Fecif), Vincent Derudder, calls for plans to introduce a ban on commission payments to intermediaries to be halted.
The proposal to ban commission forms part of the European Commission’s review of the Markets in Financial Instruments Directive, known as MiFID2.
In his letter, Derudder describes the measure as “highly anti-democratic” and says it “sometimes seems that the main purpose of new financial services regulations is to make the life of the SME intermediary ever more complicated, while at the same time diverting profitable business from Europe to other places outside Europe”.
In a more recent letter to Barnier, Fecif member Graham Reid owner and managing director of Belgium based advisory firm Classic Financial Solutions, reiterates the association’s concerns and puts forward the suggestion that introducing a cap on the amount of commission insurance companies can pay would be a more a practical solution.
Reid suggests that, given there are far fewer insurance companies, this would be easier to regulate and adds that if an insurer exceeds the permitted level it could be penalised “very simply by making the policy voidable at any time on request of the policyholder”.
Both Derudder and Reid also accuse the European Commission of ignoring the abuses of the “big and beautiful” banks and insurance companies “to the detriment of those least able to defend themselves, namely many small investors”.