The FSA has added a buying without advice section to its Money Made Clear website, warning that consumers may be unable to seek redress from the Financial Ombudsman Service if they buy the wrong insurance product.
Lifesearch head of protection strategy Kevin Carr believes this could indicate that the FSA’s imminent Icob report will make concrete rules to ensure that consumers are warned they may not have grounds to complain if they do not get advice before buying protection products.
The FSA states on the website: “You do not have to get advice before you take out an insurance policy and UK firms that sell insurance without advice still have to follow our rules. But it is up to you to decide whether the policy is suitable for you. You may have less grounds for complaint if the product turns out to be unsuitable.”
Carr says: “We are very pleased that the FSA has deemed it necessary to inform the readers of its website of the potential pitfalls associated with buying insurance without advice and we hope this is an indication of what we can expect from its forthcoming Icob review.”
At a conference last week, FSA director of small firms and leader of retail intermediaries Stephen Bland hinted at looming regulation changes.
Bland said: “We will be bringing in a small number of targeted additional requirements to help ensure that consumers can make informed decisions about the purchase of these products.”