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RDR CP: Waters says benefits of long-stop did not outweigh costs

The FSA has claimed there was not enough evidence put forward to show that the benefits of operating a long-stop would outweigh the detriment to consumers.

Speaking to Money Marketing, director of retail policy & conduct risk Dan Waters says the FSA kept an “open mind” but chose not to include a long-stop in the paper.

He says: “We have been around and around that house over the last three years and basically said on a number of occasions please bring forward the evidence about where the balance of benefits and costs would be if we were to make that change.

“We know that if we were to operate a long-stop it would be detrimental to consumers who have suffered detriment unrecognised in these very long-running pensions products. It is an occupational hazard of being in the pensions business really.

“But nobody could put a cogent case to us as to why this was going to make such a big difference in IFA capital or the ability to fund long-term business or whatever in a way that could outweigh those detriments.

“We did try, we kept a sincerely open mind right through the process, but nobody was able to come up with the argument so we landed where we landed.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. unrecognised detriment indeed
    Ah now we get it
    the real reason for no long stop is the FSAs failure to regulate products properly. Rather than do the job they are paid to do the fsa are protecting themselves from a future misregulation scandal. If the product does not do what it said it would do on the tin, the adviser will have to cough up the difference whether he is 65 75 or 105!
    The product provider & the FSA can relax meanwhile .

  2. The regulators are acting ultra vires
    When will they admit as much? The long-stop exists, they cannot override it. Can they never be wrong? Are they supremely arrogant? Make no mistake, this is not over yet Mr Waters.

  3. Julian Stevens 26th June 2009 at 2:39 pm

    RDR CP: Waters says benefits of long-stop did not outweigh costs
    So the adviser community is still to be denied the protection of the law of the land that applies universally to everyone else. The biggest occupational hazard of being an IFA is the FSA. It would be interesting to see exactly what “cases” were put to the FSA that it (the FSA) decided unilaterally were not sufficient “cogent” to be taken on board. The principal case that most IFA’s would put forward is the lifelong worry of being hounded to the grave as a result of one of the FSA’s endless stream of hindsight reviews. If that isn’t a cogent case, then what would be?

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