The FSA has published three possible options for the new sales regimes to accompany the Sandler suite of stakeholder products, none of which include full-blown advice.
Of the three options, the FSA favours the second, an approach led by filtered questions, but says it is eager to consult with the industry to gauge its opinion.
There is a “self-help” approach involving warnings about the products but leaving the burden of responsibility on consumers' shoulders for deciding whether it is suitable for them.
The second choice, labelled “guided self-help,” includes a series of filter questions decided by the FSA to screen out consumers for whom the products are not appropriate. Firms employing this sales process could not be held liable for poor advice as long as they stuck to the set questions.
The final option, “focussed advice,” would see advisers making a limited assessment of suitability according to guidelines set by the FSA. Advisers could give advice on the products without having to train to FPC3, the level required to be a fully regulated IFA.
The regime is outlined in Discussion Paper 19, Options for Regulating the Sale of Simplified Investment Products, published today.
The FSA stresses any final sales regime will largely depend on the actual structure of the new products, which the Treasury has yet to consult on.
FSA director of conduct of business standards Michael Folger says: “Of the three options that we have set out, regulation of the sales process, based on filter questions to screen out consumers at clear risk of buying unsuitable products, looks quite promising.”