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Panel against ban on complex plans

The Financial Services Consumer Panel says it would be wrong for consumers to be banned from accessing more complex products.

In an interview with Money Marketing, chairman Adam Phillips says the FSA should focus on product design rather than product regulation and that complex products should not be withheld from consumers.

FSA chairman Adair Turner last week questioned if some products are too complex to be sold to consumers and if the FSA should intervene on pricing.

But Phillips says: “In principle, we do not think anybody should be stopped from buying anything. People have a right to do what they want. The panel is talking more about product design rather than product regulation. Product regulation has overtones of price regulation.

“We need to go back to the idea of straightforward, simple products, where the characteristics can be fairly clearly exp-lained to the consumer so that they can exercise choice.”

Phillips says the panel is not in favour of maximum loan to value limits on mortgages. “There are going to be people who need more than 100 per cent mortgages and it is a very blunt instrument to limit maximum loan to value,” he says.

He is also calling for clear guidance from the FSA on arrears and repossessions.


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