The debate over which way to go on commission payments on packaged products may just be the start of a wider realisation that standardisation across 27 countries is not always the best way to go. The report in FTfm (18 July) shows how very diverse national views are on the value of, and problems associated with, packaged product commission. The FSA has, of course, been working on the RDR for several years and has developed a position which is now effectively finalised and will come into force in this country in early 2013. The FSA will not delay this, despite the possibility that European regulations will supersede the RDR at some point. Having done all the work, they are not going to leave it in the pending tray, sine die.

A combination of the FSA’s work and MiFID II has sparked off a series of comments from around the EU with diametrically opposed views from Holland (ban all commission) to France (allow all commission, it is the only way to persuade savers to take advice). And the French have added, for good measure, that any ban is ‘stupid’ and why should the RDR cross the English Channel (Manche).

Ignoring the ‘stupid’ remarks, the point here is precisely that each country has developed its own market in financial advice, resulting in very different structures for which one set of regulations would work very poorly. If this regulation is designed to protect consumers, we should recognise that a French consumer is unaffected by the arrangements for financial advice in this country, and so is a Dutch one. So where is the benefit in standardisation for this activity? Open markets do not depend on standardisation; what they need is the avoidance of protectionism. That provides the industry with cross-border opportunities without compromising consumer choice or investor protection.