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FSA says consumers may have too much choice

Too much investment choice can lead to consumer confusion and prevent consumers from acting for fear of making a bad decision, according to FSA chairman Lord Turner.

Speaking at the FSA’s financial capability conference in Cambridge last night, Turner said markets may not always work for the consumer as human behaviour can mean that too much choice can result in consumers taking no action.

He said “radical questions” need to be asked, including whether there can be too much innovation in some markets, with complexity acting as a barrier to understanding.

Turner also speculated on whether some products are too complex to be sold to consumers at all and if the FSA should intervene on pricing, at the expense of access to the market for some people.

He said: “I don’t pretend to have all the answers to these questions today. Or, indeed, that there are blanket answers that apply to every market or product. But what is clear is that consumer protection, financial capability and market intervention to protect consumers needs to be seen as part of an integrated strategy.

“And this needs to be grounded in an understanding of what role each element plays in empowering consumers and building their confidence in the market.”

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Five shades of grey
    I predicted this a few years back, it is quite scary to think that a regulator wants to manipulate markets by controlling price and now choice.

  2. FSA says consumers may have too much choice
    Hedge funds commonly levy an AMC of 2% and 20% of any profits ~ but, of course, they don’t suffer 20% of any negative returns. Might not Hedge Funds be a good place to start, if the FSA is concerned about pricing? That aside, are there no limits to the extent to which the FSA seeks to interfere with the markets that it supposedly regulates but which, in practice, it doesn’t seem to regulate very well at all? Some people may consider that the FSA has no idea about priorities or the fundamentals of proper market jurisprudence, Rather, in its never ending quest to justify its existence and calls for ever more money and power and staff, the FSA just seeks endless new things to investigate and tamper with, regardless of whether or not those things are actually in need of attention. Unbridled, out of control and power-mad are just a few descriptions for this quango monster that we’re all forced to feed year after year.

  3. FSA says consumers may have too much choice?
    I hardly think so. More to the point the FSA just wants things as simple as possible. Any regulator worthy of the name that lets the banks do what they did is hardly likely to be able to hold its head up and say we understood what was happening but decided to do nothing! Therefore if does not surprise me one jot that they want things simpler. How else are they going to understand what it is that we do?
    We do a good job as demonstrated by the FOS data on complaints. Unfortunatly we are regulated by jobsworth numpties who want a simple life.

  4. FSA says consumers may have too much choice
    It’s not too much choice that confuses consumers, it’s too my regulation, government and FSA interference that confuses consumers.

  5. More Blue sky thinking??
    Just who are the products too complex for ? the consumer or the FSA. If the FSA had their way, then it would be everything to go into currents accounts with their very good friends at the banks. Roll on the next Election to rid us of buffoons (well you can hope anyway!!).

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