§ Mrs. Margaret Ewing
To ask the Secretary of State for Trade and Industry if he will consider introducing legislation to render it compulsory for all financial advisors to disclose to prospective clients, whether as part of quotations or otherwise, the total sum received as commission for arrangement of mortgages linked to policies of endowment assurance; and if he will make a statement.
§ Mr. Redwood
[holding answer 5 December 1989]: An endowment policy, whether offered in conjunction with a mortgage or not, is a form of investment, and under the Financial Services Act 1986 it is the responsibility of the Securities and Investments Board and recognised 305W self-regulating organisations and professional bodies to make rules on the disclosure of commissions on investments.
Regulations made under the Consumer Credit Act 1974 require credit brokers who charge a fee to prospective borrowers for arranging mortgages to show the amount in advertisements and quotations; it must also be included in the calculation of the charge for credit. There are no plans under the Consumer Credit Act to require the disclosure to prospective borrowers of commission received by credit brokers or lenders.