Aifa has attacked the FSA over the scrapping of the menu and IDD suggesting it could lead to consumer detriment and affect market transparency.
Aifa public affairs director Tracey Mullins says the statement from the FSA today that the documents have not achieved the objectives of reducing commission levels, increasing the share of advice paid for by fee or reducing provider bias only show a small part of the story.
She says the main objectives of the documents were to provide consumer protection, increase consumer choice and improve market transparency.
Under the stewardship of Paul Smee, Aifa drew up plans for the payment menu as part of a number of measures to provide an alternative to the FSA’s controversial defined payment system. The FSA added on extra requirements such as market average calculations.
Mullins also says the menu created a level playing field between IFAs and banc assurers in terms of disclosure requirements and there is a worry that this is now at risk.
Mullins says: “The FSA has failed to convince the Commission of the genuine benefits of the menu in terms of consumer protection and market transparency. This announcement also raises question marks about a potentially un-level playing field between different types of advice streams.”