Panel ponders regulated products
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The Financial Services Consumer Panel is researching the merits of introducing regulated products amid concerns that half of consumers will not pay for advice after the RDR.
In a briefing document seen by Money Marketing, the consumer panel says it is commissioning research to understand the benefits, risks and potential scope of regulated products in the medium to long-term savings and investment market.
Chairman Adam Philips says when the RDR comes into force in 2012, about half of consumers will not want to pay for advice or will choose products themselves, particularly through online sales channels. He says the panel is exploring what “safer” products might be suitable for those people.
The research, which will inc-lude views on regulated products from the Financial Ombudsman Service and the Financial Services Compensation Scheme, is due to be published in June.
FSA chief executive Hector Sants recently announced the regulator’s plans to scrutinise products at the design stage in an effort to intervene earlier.
Philips says: “Many customers will move to the internet, where they will assume that the sales promotion they get is advice. It is vital that the industry and the regulators start thinking about how to deal with this trend and how limited advice might be given in a way that provides protection for people who choose to use the internet channel.”
Paladin Financial Services managing director Tim Purdon says all products should be regulated by the FSA, not just those available direct to consumers.
He says: “The FSA has a responsibility to risk-grade products.”
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Readers' comments (2)
Julian Stevens | 8 Apr 2010 6:01 pm
Product regulation is an area from which the FSA will ultimately shy away.
Firstly if the FSA accords a particular product its seal of approval and then the provider goes bust or if some unexpected flaw manifests itself at a later date, everyone will turn round and rightly point the finger of blame at the FSA.
Secondly, you cannot regulate product suitability (the old Porsche 911 analogy) and thirdly, even if the FSA were to take on responsibility for product analysis and approval, that would require even more money, even more staff and even more powers than those for which Adair Turner is already calling on a regular basis.
Where will it end? The answer is that there is no logical end. You cannot regulate every conceivable aspect of every sale of every product and, as we've already seen, the FSA can't even regulate competently within its present remit.
So all this is a waste of time and money ~ but on that, we can all agree. the FSA are true champions.
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Steve | 9 Apr 2010 9:45 am
I read this, put it down and read again.
In this article the FSA are actually admitting that half of Consumers will not pay for advice after 2012 (RDR).
We are being run by an amature outfit, who are causing our industry great harm.
Once the RDR comes into force it will never be able to be repaired.
With some outstanding Advisers leaving the Industry
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