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Probes are useless unless FSA stops making a mystery of KFIs, says BSA

The BSA accepts that firms which have been newly regulated since M-Day are still going through a bedding-down period but says there is confusion in the market over FSA criteria for KFIs.

The comments follow an FSA mystery-shopping exercise in August which showed that 55 per cent of lenders and advisory firms did not issue KFIs and IDDs at the correct point. In May, the regulator claimed: “The FSA has identified variable quality” in KFIs following another mystery-shop and wants to promote a less is more strategy for disclosure.

The BSA says its members cannot react to the findings of the FSA without knowing what exactly the regulator believes that a KFI should contain.

The BSA also understands that consumer group Which? is close to embarking on a study of KFIs, advice to customers and MCOB generally.

BSA external affairs man- ager Rachel Blackmore says: “There is work to be done and discussions to be had with everybody over producing KFIs. There is some confusion as to what the FSA actually wants. In this respect, there cannot possibly be consistency.”

FSA spokesman David Whitely says: “There are bedding-down issues but to be pres- criptive on this would be dangerous as there needs to be a balance. As we provide the signposts and guidance, we would expect firms to take notice.”

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