View more on these topics

£140m cost of key facts format

Proposals for the next generation of product disclosure could cost the industry £140m with the end of key features documents and separate disclosure regimes for life and pensions and investment products.

According to a draft FSA consultation paper on product disclosure due to be published on January 31 but seen by Money Marketing, KFDs will be replaced by key facts, a new format transforming product information to consumers.

The most radical difference between the two new regimes will be the need to disclose past performance on investment sales, something the FSA had strenuously opposed.

Providers will have to include a bar chart showing 10 years&#39 discrete annual returns, cumulative returns for a hypothetical £1,000 and a prominent risk warning.

The FSA logo will become more prominent on literature and disclosure of charges will be substantially changed to focus on comparability between products.

The front of the new key facts, which must be given to consumers early in the sales process, will feature only the FSA logo, the company name and the name of the product.

Suitability letters will be strengthened as the FSA believes they are read by consumers and post-sale confirmation letters will be scrapped.

The new document must also be sent out on execution-only sales.

Invesco Perpetual chief executive Mike Webb says: “The use of discrete past performance sounds very sensible. It will show an investor what sort of ride they are in for.”

Recommended

NDF Administration – Higher Income & Growth Plan 3

Wednesday, 22 January 2003 Type Guaranteed equity bond Aim: Income or growth linked to the performance of the FTSE 100 index Minimum-maximum investment: £10,000, £7,000 Isa-£1m Term: Five years two months Guarantee: Capital returned in full provided the index does not fall by more than 40% Return: 8% gross income a year, 0. 64% gross […]

Giving up the lion&#39s share

The Diary has learnt from a disgruntled group of Antipodian backpackers that they were forced to share their youth hostel dormitory with a family of five from Bristol visiting London for the weekend.We understand that the daddy was none other than Hargreaves Lansdown&#39s ubiquitous pension spokesman Tom McPhail together with his girlfriend and their children […]

Jayne-Anne Gadhia

Jayne-Anne Gadhia, managing director of The One Account, compares losing the Virgin brand name with giving up her surname when she got married.The current account mortgage lender is the first company set up by Virgin forced to drop the household name – loved and loathed in equal measure – after being acquired by Royal Bank […]

All change for £20m Raising Standards scheme

FSA managing director John Tiner has stoked fears that the Raising Standards initiative could become redundant, claiming it is based on the old regulatory regime which is about to be overhauled.Despite saying he was pleased with the progress of the initiative, Tiner, speaking at the Raising Standards annual conference, said a new regime dubbed “son […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment