The Government is confusing simplicity with suitability when it comes to Catmarked products, says former regulator and ex-Labour MP Dr Oonagh McDonald.
By depolarising Catmarked products, McDonald believes the Treasury is running the danger of direct salespeople selling products to consumers just because they are straightforward, not because they are the most suitable.
Speaking at an LIA conference last week, McDonald said she does not believe direct salespeople have the competence to make decisions over the suitability of products for consumers and the Treasury is only making matters worse by allowing them to sell other prov iders' products.
She said steps must be taken to ensure consumers are sold products that are right for their needs. McDon ald also urged the industry to come to an agreement over an accreditation system for advi-sers which consumers can rec ognise easily.
She told the conference she would like to see a raising of training and competence among the back-office staff of life and pension offices and claims more responsibility must lie with sen ior management when things go seriously wrong such as pension or endowment misselling.
McDonald said: “It is imp ortant that companies come up with a sufficient level of competence to understand the wider issues of the products they are selling. The fact that a product is Catmarked does not necessarily mean it is appropriate for the customer.
“There is a big difference between whether the product is simple or suitable. The Gov ernment seems to be con fused by this.”