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FSA&#39s pill sticks in the throat

As a long-term Partick Thistle supporter, I am used to the feelings that many West Ham fans have been enduring recently. Some years ago, we were losing a match 4-0, only to win 5-4. As the team trooped off the pitch, one fan shouted: “You guys should carry a Government health warning.”

If I ever want to recreate such a feeling of despair, I just buy the weekend papers. Recently, they carried articles based on the comments of our latest consumer champion at the FSA, Anna Bradley, who said the financial services industry could learn better practices from the way that drugs are marketed.

Now, either she has led a sheltered life or she is simply unaware of the way that drugs are pushed to GPs, the fact that there is an inquiry under way to consider overcharging by drug companies and the way that drug companies use the patent laws to hold up prices and so on.

Having said that, she did make some valid points that we all need to consider about how we can regain the public&#39s trust.

Given the overall thrust of her comments, to avoid the drive for sales at all costs, I hope she will ensure the menu is enforced vigorously on the tied, multi-tied, white-labelled and all varieties in between.

The most essential part of the drive to improve consumer protection must be education. Perhaps this could start with lessons on trying to determine the status of your financial adviser.

Making simple comparisons in complex situations needs to be avoided, just as we saw with the pension review. Those clients who were put back into their schemes were seen as those whose compensation was the most accurate. Or were they? Given that some of these schemes are being wound up and reduced benefits paid, it would be fascinating if some of those put back had their position rechecked to determine if they would have been better staying put in the plan they transferred into.

Compensating people on the basis of multiple assumptions is highly suspect and will inevitably lead to problems unless all the assumptions are proved to be largely correct.

If we are to ensure that no overzealous sales practices are going on, we need to revisit the idea that restricting charges is enough to avoid any problems.

What we need is a simple way of getting across this message to the public. As a fan of alliteration, can I suggest the three S&#39s? Standards, simplicity and status are my three key elements to achieve a better market for consumers.

Standards

If we truly wish to protect the public, then moving the competence level up to a minimum of AFPC is in everyone&#39s interest.

Simplicity

The product proposition must be unambiguous and not so complex that it becomes impenetrable.

Status

Just who is the adviser working for and just what is the risk of bias? If the income of the adviser is dependent on product sales, then tell the client.

Back to the football, a player, Bobby Law, having a nightmare of a game, had to listen to continuous suggestions that he should leave the field of play. As he was taking a throw-in, the crowd fell quiet, with the silence broken by an old wag who shouted: “Taxi for Law.” This left all but the offending player in hysterics. Unless we see effective, practical and monitored status disclosure, perhaps the call should be “Taxi for the regulator.”

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