The European Commission has launched a survey looking at the viability of introducing lighter-touch regul-ation along the lines of the Sandler suite of products to other member states.
The Sandler review concluded in 2002 that there is a need to define a series of safer and easier to understand financial products which would be subject to a streamlined system of sales regulation.
The EU's survey aims to determine whether the other 14 member states have also identified such a need. It will assess what action has been considered by the states and what action has been taken or has been planned and will list the characteristics of the products developed.
The EU has invited consultancies, including Charles River Associates, to consider the issue. CRA carried out res-earch on commission bias in CP121 for the FSA and is inv-olved in research for the ABI looking at how commission affects the way that long-term savings are sold.
The firm also carried out a cost-benefit analysis for Aifa on the menu system and found that the menu, as opposed to the FSA's defined-payment system, could save the market £95m a year as it fosters the development of a more competitive advice market.
The main stumbling block for the implementation of Sandler-style products in the UK has been the trade-off between a simpler sales pro-cess and a price cap, with providers unwilling to get inv-olved at the current proposed 1 per cent cap.
The Treasury is expected to announce its final decision on the price cap on June 17, when the FSA is set to outline details of its simplified sales process.
Thomson's chief executive Douglas Gardner says: “I am not so sure there is a need for these products across Europe. A lot of what is happening in this market has been driven by the history of regulation and Government intervention. A lot of other EU nations do not share the same problems.”