Financial Conduct Authority Commission Ban

Published 18 October 2019
in Announcements
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At Pike & Bambridge, we have long championed the cause for a more transparent, fairer method of commission structures when it comes to the sale of finance around cars.

A family with two cars potentially spends as much on their monthly car finance, or more, than the mortgage on their house, and there continues to be a big gap in the quality and qualifications of advice in the car finance market.

When we launched in 2012, the IFA world had recently gone through the Retail Distribution Review process with the Financial Conduct Authority, in the wake of the financial crisis in the late 2000s.. We looked at the way car finance was being sold, predominantly by dealers, and it just didn’t seem in line with other financial products. We set up Pike & Bambridge to be focused on dealing with the professionals market, and our flat fee, transparent commission structure was unheard of at the time.

Since the FCA took over the compliance of the car finance market in 2014, we have seen a slow tightening of the rules, culminating in the Motor Finance report in the Spring of this year.

This week, the FCA announced they plan to ban the way that some car dealers and brokers make commission on sales. As the BBC highlighted.

Some brokers and car retailers make a commission on the interest rate they charge customers who take out a loan to buy a car. The higher the interest rate, the higher the commission. 

"We have seen evidence that customers are losing out due to the way in which some lenders are rewarding those who sell motor finance," said Christopher Woolard, executive director of strategy and competition at the FCA."

At Pike & Bambridge, we think this should be just the beginning. We see a future where the sale of financial products relating to cars is as regulated as the sale of financial products across mortgages, pensions, and investments.

We’d love to see a full qualification requirement from the FCA to be able to sell these products, as well as a “Chartered” status seen in other financial services industries, promoting excellence and professionalism, and improving the reputation of the industry.


Until this happens, our clients can continue to trust that we believe it is important to continue our founding focus on treating our customers fairly, changing the way the professional world buys cars.