The financial services industry is warning that Government plans to force
the FSA to publish product league tables will lead to a misbuy ing
Experts fear consumers will believe that the tables are officially
endorsed best-buy tables and will shun advice.
Some industry figures also feel the tables make the scope of the FSA too
wide, putting it in the position of offering investment solutions.
The tables, which are expected to be published in March, will focus on the
most popular investment products, such as personal pensions, endowment
policies, equity Isas and investment bonds.
The regulator plans to rate financial products on 10 criteria, including
quality of service, clarity of sales lit erature, price, flexibility, risk
It is also proposing to rate the financial strength of product providers
selling with-profits investment plans.
But the FSA is controversially rejecting using past performance as an
indicator, despite its widespread use by consumers.
Senior regulators are aware of industry disquiet but they have been told
by the Chancellor that they must see the project through.
Regulators say they want to provide an opportunity for the industry to
shape the league tables.
The FSA emphasises that the tables should not replace the need for advice
but will help to inform consumers better and put pressure on poor buys.
Economic Secretary to the Treasury Melanie Johnson says: “The tables are a
very important part of the consumer's tool kit and will encourage better
FSA spokeswoman Sarah Modlock says: “The consultation should be seen as a
positive opportunity for firms to make a difference to the way this project
But LIA director of communications John Ellis says: “It will be very
difficult to put together anything that will be at all meaningful to
“Less sophisticated investors who mistake these for best-buy tables may
buy the wrong product and will have no comeback from a financial adviser.”
IFA Promotion managing director Ann-Marie Martyn says: “Consumers will be
confused into thinking these are best-buy tables.”