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Aifa backs the FSA focus on providers’ responsibilities

Aifa has praised the FSA’s paper on provider/distributor responsibilities, saying providers can no longer stand by in “splendid isolation” allowing advisers to be blamed when things outside their control go wrong.

Director general Chris Cummings says advisers have been unfairly blamed for too long for problems with marketing and product design.

He says that the paper’s focus on product providers considering client needs when discussing distribution highlights potential problems with non-advised sales, particularly in equity release and protection.

He says the discussion paper, which was published last week, provides a clear message for providers to improve their post-sales service and says advisers are always ready to accept responsibility for advice as long as they have been given accurate and timely information.

The paper aims to provide more clarity on the provider/ distributor relationship, resulting in a statement of responsibities as part of the FSA’s treating customers fairly regime.

The paper encourages providers to design products with greater care, provide higher quality information, monitor distribution channels more effectively at a high level and undertake better post-sale analysis.

The regulator says it is not placing new regulatory responsibilities on providers or distributors, nor is it looking for providers to police distributors.

Cummings says: “Providers can no longer stand in splendid isolation insulated form the problems of products they have manufactured, nor can they seek to walk away when design problems arise, passing the buck to the IFA community.”

Association of British Insurers director of consumer strategy George Hodgson says: “This is an important issue and we have already been focusing on it. The FSA’s paper does not propose any new responsibilities for providers or distributors but is a useful discussion of existing regulatory arrangements.”

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