George Lee (Dublin South, Fine Gael)
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Question 215: To ask the Minister for Finance his views on whether it would be sensible and prudent to introduce legislation promoting independent and impartial financial advice by banning commissions in order to protect investors and savers here from untransparent and unreliable financial advice and the mis-selling of financial and investment products; and if he will make a statement on the matter. [36773/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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There are currently no plans to proscribe the use of commissions by financial intermediaries in Ireland. 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's July 2006 Minimum Competency Requirements set out minimum standards across all financial service providers which are applicable to individuals who, on a professional basis, as or on behalf of a regulated firm, provide advice to consumers on retail financial products, arrange or offer to arrange retail financial products for consumers or undertake certain specified activities. Retail financial products include shares, bonds and other investment instruments and savings, investment and pension products.

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. The Financial Regulator's 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.

In addition, there are provisions in the Code, for the protection of those persons which are classified as 'consumers' under the code, which set specific requirements with which the regulated entity must comply in areas such as its terms of business, provision of information to the consumer, knowing the consumer and suitability.

Regulated entities are required to comply with both the Code and Minimum Competency Requirements as a matter of law and the Financial Regulator will investigate any matter brought to its attention where it appears that these, or any other regulatory requirement, may have been breached by an entity. Any allegation of mis-selling of financial products is a serious matter and will be treated as such by the relevant authorities and any complaint regarding the conduct of a regulated entity should be brought to the attention of the Regulator for investigation. Where found by the Financial Regulator to have breached its obligations, a regulated entity may be subject to financial or other sanctions.

The Deputy may wish to note that where a customer has a complaint regarding his/her treatment which has not been resolved through the internal complaint resolutions systems of a regulated entity, the customer may bring the matter to the attention of the Financial Services Ombudsman for investigation. I am therefore satisfied that adequate safeguards are in place to regulate the activities to which the Deputy refers.