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FSA gets ready to scrap RU64

RU64 could be set to be scrapped, with the FSA to consult on its abolition in the New Year.

Money Marketing can reveal that the FSA will be consulting the
industry early next year on whether the much criticised RU64 rule,
which forces advisers to justify recommending any pension product
other than a stakeholder pension, should be abolished.

MM understands that the regulator is likely to phrase the
consultation in a way that makes clear its desire to get rid of the
rule which is described by Standard Life senior technical manager
John Lawson as “an anachronism”.

But head of investment policy David Severn’s move to Aifa has raised
concerns in the industry, as he is widely seen as the strongest
opponent to RU64 at the FSA and there are fears that his successor at
the FSA may not be as keen to abolish it.

Aifa acting director general Fay Goddard says: “The fact that the
FSA is consulting on this means they recognise that it is an anomaly
that needs to be reviewed.”

Beachcroft Wansbroughs Consulting managing director Richard Hobbs
says: “It is vitally important for consumers as much as anybody that
the RU64 rule is removed. It causes distortion and means that people
save less than they really need to save.”

Clerical Medical pensions strategy manager Nigel Stammers says:
“RU64 is outdated but protection for existing policyholders is there
in a new form through Treating Customers Fairly. There is not a lot
lost in getting rid of RU64.”

Charcol founders John Garfield and Charles Wishart have returned to
the firm they founded 30 years ago as part of a new management team
after a buyout deal.

Bradford & Bingley sold Charcol to newly formed investor
consortium Castlegate 342 for a figure believed to be 5.8m.
Charcol is looking to recruit some of its former sales consultants to
kickstart the firm’s fortunes, writes Andrea Tryphonides.

Pictured standing, from left to right: product director Walter
Avrili, senior technical manager Ray Boulger and non-executive
director Charles Wishart. Seated, left to right: managing director
Peter Barrett, executive chairman John Garfield, marketing director
Candice Hodgson and chief operating officer Clive
Kornitzer.

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