The FSA is considering extending its RU64 rule to other product types.
As part of this week’s discussion paper on product intervention, the regulator says it sees the rule as an important tool for protecting consumers and that it could extend the rule to include other product areas.
The RU64 rule requires advisers when recommending a pension that is not stakeholder to explain in writing why the recommended policy is “at least as suitable as a stakeholder pension”. The regulator was widely tipped to scrap the controversial rule in 2007 due to the effect it was having on pension sales but found there was insufficient evidence that it should be removed.
In this week’s paper, the FSA says it sees the rule as an important consumer protection tool that could be introduced in other areas.
The paper says: “We could consider extending a similar requirement to advised sales of other types of product. The rule appears to be most suited to investment products with explicit charging structures. But we would welcome thoughts on whether or how it could be applied in other retail markets”.
“This option would not provide a cap on prices. It would still be possible to sell more expensive products where there is a demonstrable need, but it would set a benchmark and encourage greater assessment of the value for money of propositions.”
For a full round-up of the paper see this week’s Money Marketing.