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Kelly says Treasury backs stake suite

The Treasury has given a ringing public endorsement of Ron Sandler&#39s flagship recommendation of a stakeholder suite of products.

Treasury Financial Secretary Ruth Kelly called the products a fundamental part of the Treasury&#39s thinking and commended Sandler for recognising the advantages of product rather than sales-based regulation.

The comments come a week before the Government responds to Sandler&#39s proposals.

Speaking at a fringe meeting at Labour&#39s conference in Blackpool on Tuesday, Kelly said the current distribution of products is skewed towards higher-net-worth investors, leaving lower-earners in the cold.

The meeting was attended by FSA chairman Howard Davies, who said the FSA is working with the Government to design the products and the new regulatory framework.

Despite recent speculation that the FSA had concerns over stripping out conduct of business regulation on such products, Davies gave no sign this was the case. Kelly said regulation had become burdensome and disenfranchised many people from the industry.

She said she could envisage a world where the stakeholder suite will be sold alongside Catmarked products, offering consumers the same protection but under different brand names.

Kelly said: “The way that regulation has developed has become quite burdensome and focused on the way products have been sold but it has disenfranchised many people.Ron Sandler has recognised the advantages of product regulation. It is similar to the fundamental idea behind Catmarked products.”

Davies said: “If it is possible to devise a genuinely safe suite of products, that would certainly justify a different approach to conduct of business regulation.”

Aifa director of policy Fay Goddard says: “One of the FSA&#39s statutory objectives of consumer protection is pushed to one side. These products are going to be sold by unqualified advisers in an unregulated process. It is going to be very difficult to police and monitor.”

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