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FSA board meeting to decide fate of RU64

The FSA is holding a board meeting this week to decide the fate of RU64 but has denied reports that it has already decided to scrap the controversial measure.

The regulator strongly indicated it would abolish the directive in a consultation paper last June but infuriated the industry after deciding to postpone the decision due to uncertainty in the run-up to implementation of personal accounts.

According to market sources, the FSA has promised that the rule will be scrapped imminently but a spokesman says the decision is still up in the air. The rule, introduced in the run-up to stakeholder, requires advisers recommending personal pensions to explain in writing to their clients why the pension is at least as suitable as a stakeholder pension.

The spokesman says: “We will probably make a decision in the next week or two but will not make a decision until the board meeting has taken place.”

Axa head of pensions and savings policy Steve Folkard says: “RU64 ran its course years ago. Advisers have moved on a lot since stakeholder.”

ABI spokesman Jon French says: “RU64 should be abolished without further delay. It has reduced access to financial advice and is inconsistent with principle-based regulation.”

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