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Raising the mark on standards

This year will be an important one for the Raising Standards quality mark scheme.

Just two years after its creation, we have achieved critical mass, with more than 50 per cent of the market accredited or preparing for accreditation.

Standard Life, Halifax Life and Clerical Medical are in the dry-run phase – the first step towards securing the quality mark. But we cannot afford to rest on our laurels, particularly as the performance of the markets puts the industry under pressure and tests consumer confidence still further.

Our priorities for this year will be to create new standards where they are needed, increase the numbers of accredited companies and widen the gene pool scope to include more eligible friendly societies and investment companies.

The Industry Standards Group will be doing more to encourage companies from other parts of the financial services industry to adopt the scheme. We have already started this process and the feedback is positive and looks very promising.

Much of our effort will concentrate on communicating directly with IFAs so that there is a wider understanding of the consumer benefits of the scheme.

Feedback from IFAs shows that there is more to do to persuade advisers of the importance and benefits of the scheme but that the vast majority support the principles behind the scheme and are keen to see more companies sign up. This is clearly a priority.

Raising Standards has influenced the industry in the way we communicate with customers, explain our charges and design our products. The need for clear communications is even greater at times such as these.

Our research shows that more than two out of three people say that confusing documentation puts them off planning their finances – so-called financial phobia.

But 83 per cent said they would be more confident buying financial products if they could choose a company with a quality mark. This evidence presents real opportunities for Raising Standards accredited companies.

The FSA&#39s proposals on disclosure at the point of sale will, I hope, confirm the value of this work to improve our communication. FSA managing director John Tiner said at the recent Raising Standards second anniversary event that much of the FSA&#39s thinking builds on the experience and thinking of the Industry Standards Group.

He reassured us that accredited companies will find the transition to a new regime much easier.

Customers who choose a Raising Standards accredited product are starting to get clear information about their investment from their yearly statement. In fact, this year alone, 11.6 million customers will get a Raising Standards-style yearly statement.

We know the scheme is influencing the industry across a broad spectrum, since 80 per cent or 9.7 million customers fall outside the strict scope of the scheme. Customers will also see the changes when they are buying our products.

More than 2,800 items of sales literature have been improved and almost 400 individual products are currently within the scope of the scheme.

Independent assessment of the scheme by Moneyfacts also shows that Raising Standards has played a fundamental role in driving change within companies, improving their offering to consumers and encouraging the push towards simplification and demystification.

Raising Standards continues to evolve and we are proposing a tough new standard for customer complaints. Customers tell us that the current system could be improved and we want to address this by creating a new standard.

We are leading the way in this area as the new standard will exceed FSA requirements. We hope to introduce it in the spring.

The scheme has done well in it first two years. It has an excellent foundation from which to build and make even more of an impact with the most important group of all – our customers.

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