Death of the banking salesmen?

This morning Martin Wheatley from the City Watchdog, the Financial Services Authority, is calling time on the era where banks made pots of cash from commission. With a nostalgic look, he'll fondly recall the era where at the bank, having patiently queued up to deposit your money, you might have passed the time of day with the clerk, and they would not have also asked if you wanted a new credit card, a new loan, an insurance policy, delete as appropriate.

After the disasters of PPI mis-selling and swaps, few would disagree that a proliferation of commission based products led to some overly aggressive marketing. One senior banker describes it, as "We became salesmen, and that has to end." But if we pause for a second, getting rid of commission-based products could hasten an end to something many consumers prize.

But the FSA has already suggested, if bank accounts are largely free, banks understandably look to selling other products to make their money. Like it or not, plain old high street banking on its own is not a wildly profitable business. So if banks stop selling other products where they can make profit, the days of free banking are more likely to come to an end.

It will be very difficult for any bank to be the first to admit they might phase it out, but there is a lot of thinking going on in the City at the moment over how to proceed. Getting rid of commission-based products may well have a cost elsewhere.