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Minister&#39s view on changes

Your Poles Apart campaign is a valuable contribution to the debate which we have encouraged consistently since the possibility of change to the existing polarisation regime was first raised.

Your Ten Questions cover a wide range of issues. First and most important, let me assure your readers that all decisions for possible change will be taken by Ministers, but only after full public consultation.

As you know, since the DGFT report was published last year we have taken great care to ensure that decision is fully and properly informed. The FSA has been very open about its role and the research

which it has commissioned. Michael Folger has already set out in some detail for your readers what

the FSA has done to promote discussion. We welcome that. We have ensured that the Treasury

received copies of representations received on publication of the FSA research. We are open to the

views of interested parties.

We recognise the importance of IFAs in promoting savings and investment, and their success in doing so.

By the late 1990s this was manifest in a growing share of new life and pensions business.

But things change. New products and new delivery channels are developed. Customer expectations change. We need to keep abreast of these and look at existing arrangements to see if these are still the best for all concerned.

We believe that it is now a good time to look at these arrangements again, having been in place since 1987. The introduction of new regulation arrangements and implementation of the Financial Services and Markets Act offer a timely and helpful framework for this.

That does not presume significant change. We are still considering whether change might be required, and we cannot reach a final decision until we have received the views of the FSA. Once we have had an opportunity to consider these, alongside the views of others, we will announce our response. This process will consider the issues raised in your Ten Questions. They will not be overlooked.

The Government wants to see the most competitive and trusted savings and investment market possible.

IFAs have a part to play in delivering that. You can be assured that when we look at how best to proceed in the future, consumer interests will be at the heart of our thinking. But they do not have to be in opposition to competitive or economic interests as you imply.

An effective, innovative, competitive environment will deliver benefits for consumers and business alike. The right solution will accommodate the best balance between all interests. We are determined to find that through wide and open consultation with the industry, with IFAs and with consumer representatives. Only then will Ministers take their decision.


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