The Communication Workers Friendly Society has slammed the Government and the FSA for rubber-stamping changes to financial products which the society believes are detrimental to the people the regulator is trying to help.
Chief executive Edward Chapman says the Government and the FSA's support of Sandler's no-advice framework proves that the regulator and the Government have failed to understand the target audience of low to middle-earners.
Chapman says that when people on low incomes do not save it is because they cannot see the point of saving and by stripping out advice, Sandler products will fail to convince people in these groups of the need to save for their future.
He asserts that with CWFS's customers, who are mainly postal workers, earning on average of £15,000, the mutual has seen at first-hand what Sandler's target market needs.
Advice needs to be at the heart of the savings equation when planning to sell products to “poorer people”, says Chapman.
As an alternative to Sandler, CWFS is looking to launch new initiatives to advise and sell savings products that can include advice.
Chapman says: “The FSA's present research on the sales process of stakeholder products has come up with a false positive. It has not looked at the issue of what type of advice that this market sector needs. Mutuals have to be the conscience of the financial services industry and blow the whistle here. I am calling for a new approach to selling and to advising people on low incomes.”
FSA spokeswoman Jackie Blyth says: “We are continuing to do research with Sandler's target market and are going through a full consultation period. No decisions have been made as yet.”