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FSA wants to widen stakeholder range

Regulator in discussions about private companies giving generic advice

The FSA has raised the possibility of widening the scope of the stakeholder regime to products in its responses to the Treasury select committee.

Chairman Callum McCarthy told MPs that the basic advice regime is working “perfectly reasonably” and the regulator will be looking to see if it can be applied more widely, with over 30 products possibly being included. It currently covers pensions, medium-term investment products, child trust funds and cash deposit accounts.

McCarthy said it is not up to the regulator to comment on the number of people using the new regime but said that so far there had been no evidence of malpractice and if this continues for the next year it will look at increasing the number of stakeholder products.

On IFA issues, McCarthy said advisers had to understand and have command of the benefit system and the tax rules surrounding it when giving advice.

Tiner told the meeting that the regulator is in discussions with various parties about the subject of generic advice. He said it would be looking at ways in which private comp- anies and charities could give this advice cheaply. He saw potential for advisers to offer this unregulated advice as a possible gateway to clients for full regulated advice.

When quizzed on the subject of financial education, Tiner said he hoped that the Department for Education and Skills would take responsibility for overseeing this area in terms of costs and including it in the curriculum. It is currently the FSA’s responsibility.

McCarthy said: “For a particular group of products, we will want to see whether this regime can be applied more widely. There are other simple products with less risk, a great variety of them, which could be included in the regime but we will not name them at this stage.”

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