George Lee (Dublin South, Fine Gael)
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Question 275: To ask the Minister for Finance his plans to promote independent and impartial financial advice by banning commission for money managers in order to prevent product providers from offering commission in order to secure sales and banning advisers from recommending products that automatically pay commissions, as has been done by the Financial Services Authority in the UK; and if he will make a statement on the matter. [33475/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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It is understood that the Financial Services Authority in the UK is currently engaged in a consultation process on the matters the Deputy refers to. As such, the outcome of this process is yet to be determined.

There are currently no plans to proscribe the use of commissions by financial intermediaries in Ireland as it is considered that the existing legislative protections in place for the consumer sufficiently empowers the Financial Regulator and the Financial Services Ombudsman to investigate and, if necessary, sanction any misbehaviour in relation to mis-selling of financial products or the provision of financial advice which does not serve the best interests of the customer.

The Financial Regulator Consumer Protection Code, which came into effect in August 2006, is a legally enforceable statutory code which is applicable to all entities which the Financial Regulator regulates.

Under the General Principles of the Consumer Protection Code (the Code), all regulated firms are required to: act honestly, fairly and professionally in the best interests of the customer; make full disclosure of all relevant material information, including all charges, in a way that seeks to inform the customer; and seek to avoid conflicts of interest.

The disclosure of sales remuneration in relation to certain life assurance products is required by the Life Assurance (Provision of Information) Regulations 2001. These Regulations cover life assurance products, personal pension plans and life assurance investment and savings products.

The sale of investment products is covered by the Regulations which transposed the Markets in Financial Instruments Directive (MiFID) into Irish law. Under these Regulations firms are required to ensure that there is clear and prior disclosure to its clients detailing the existence, nature and amount of the commission.