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&#39Sandler set to blame FSA&#39s complex rules for savings gap&#39

Ron Sandler will lay the blame for the savings gap at the FSA&#39s door, stating in his final report that its complex rules dissuade consumers from investing, according to the Sunday Telegraph.

It is believed that Sandler will publish his recommendations in late May and will recommend the creation of a savings product even simpler than stakeholder pensions or Catmarked Isas and not subject to the same regulatory costs, the newspaper says.

The new product will be so straightforward that it can be sold off the shelf in banks or even supermarkets.

Aifa says it would welcome such a move as compliance costs make it difficult to offer advice, creating a barrier to saving. However, the IFA trade body says it would be difficult to implement the proposition as stripping out regulation would involve a number of authorities such as the Treasury, the FSA and the Inland Revenue working together.

Sandler is also believed to be look at shaking up the life insurance industry. It is thought that one proposal under consideration is to prevent listed providers from using with-profits policyholders&#39 assets to cover the company&#39s running costs and dividend payments.

Industry sources are suggesting the publication of the report will be in late May to coincide with the FSA&#39s with-profits review.

A Treasury spokesman would not comment although, privately, Treasury sources say there was nothing in the Sunday Telegraph&#39s story which surprised them.

Aifa director general Paul Smee says: “You can create the product but can you create the demand for it? This is what stakeholder was supposed to be all about. Saying that, the cost of advice has always been distorted by the cost of compliance and the proposals in CP121 will only make this worse.”

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