View more on these topics

FSA confirms new suitability requirements

The FSA has published its guidelines for a simplified, less prescriptive version of the suitability letter as part of its final disclosure measures for the new conduct of business sourcebook.

It has also announced that firms will only be allowed to use the FSA’s keyfacts logo if they copy out the menu and IDD documents as they appear in the handbook, despite the fact that the documents will move from rules to guidance from November.

The FSA says the new suitability report must set out the client’s demands and needs, explain why the firm has concluded the recommended transaction is suitable for the client and an explanation of any possible disadvantages of the transaction for the client.

The regulator says advisers will have greater discretion in what appears in the document whilst retaining consumer protection.

The FSA’s policy statement also clarifies other requirements that have been retained as consistent with the objectives of Mifid- in the aftermath of the FSA’s recent decision to move requirements to supply a menu and IDD from rules to guidance.

These include requirements for an adviser to be called independent, the simplified prospectus or key facts document and disclosure of how much commission or commission equivalent they are paying.

The FSA policy document confirms the regulator’s post implementation review is examining a range of possible options for menu and IDD replacements, which would be subject to consultation in early 2008 and may require Article 4 notifications to the European Commission.

The new conduct of business sourcebook will be introduced on November 1.

FSA head of retail investment policy Andrew Sykes says: “In confirming our position on these measures, we are nearing completion of our new investment conduct of business rules that will come into effect later this year. These measures allow us to retain a number of important safeguards for consumers. We are only retaining measures where we have been able to show that the benefits of doing so will outweigh the costs.

“More generally, in line with our principles-based approach to regulation, our new investment rules will give firms greater freedom over how they meet both our requirements and the outcomes we expect.”


Mercer Global seeks strategic partnerships to access UK

Manager of managers specialist Mercer Global Investments is entering the UK retail market through a limited number of strategic partnerships with insurance companies and will be adding three new funds to its range.MGI says it is in discussion with prospective partners which will bring brand recognition and administrative resources to the proposition.Until now, MGI has […]

‘Regulator willing to sanction consumer detriment’

Aifa believes the FSA’s admission that primary advice will lead to “sub-optimal” recommendations means that the regulator is willing to “sanction consumer detriment” in a bid to close the savings gap.Director general Chris Cummings says the proposal for a primary advice channel, put forward in the retail distribution review, is an area of concern for […]

PI firms taking longer view of policies

Professional indemnity insurers are increasingly offering longer-term policies, which brokers say should benefit intermediaries.Prime Professions director Richard Brown says 12-month and 18-month terms have been the standard for advisers but many insurers are now enabling advisers to lock in the current soft market rates for longer periods.Brown says: “We are definitely seeing more two-year policies. […]

Critical concern at scoring system

Defaqto has been accused of sparking an “illness race” by encouraging insurers to add conditions to critical-illness policies just to boost their scores.The company judges different critical-illness products against a range of criteria and scores products out of five for each illness they cover.Bright Grey product manager Roger Edwards says he is concerned that some […]

Developing your personal relationships – Webex

Read more 9amFinancial advisers and solicitors working together Presented by Ian Muirhead, director & chairman at Solicitors for Impartial Advice (SIFA) Listen to Ian’s expert insight and experiences of how financial advisers and solicitors can work together to deliver mutual benefit and enhanced client outcomes. Register here 10am Financial advisers and accountants working together Presented […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm