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IDD scrapped alongside plans to use ‘independent’ and ‘restricted’ labels

The FSA is proposing to replace the initial disclosure document with a requirement to disclose key information about a firm’s service.

In today’s final MMR consultation paper, the regulator has confirmed the IDD will be replaced with a requirement to disclose information such as the firm’s product range and how it is paid in the first client meeting, as it proposed in its disclosure and distribution MMR consultation paper from November 2010.

The FSA has also proposed to reduce the number of “trigger points” for issuing a key facts illustration, meaning intermediaries will only have to issue one when advice has been given on a certain product. Currently a KFI has to be issued when information has been given about a product.

It has also ruled out using the same “independent” and “restricted” labels as will be required for investment advisers under the RDR. Instead firms must ensure they give customers a “plain and simple” explanation of whether there are any limitations in the product range they provide.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. So advisers have to decide whether they will be independent or restricted, but can’t tell clients which one?

    This is presumably due to pressure from Banks, who will want to continue pretending to their customer base that they offer a free service and also that their offering is in no way inferior?

    You couldn’t make it up

  2. Well the proposed changes are not due to occur until the Summer of 2013 – and so hopefully by then, the distinction between ‘Independent’ and ‘Not Independent’ will be clear to clients – and MAS will inform the general public that they need to ask key questions of their adviser!

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