Skandia supports the FSA’s proposal to split distribution into advice and no advice and to introduce customer agreed renumeration. However, it believes that uncertainty could be created if these rules are only applied to part of the market as firms could interpret them differently when handling products outside the investment sector.
In the RDR interim report the FSA says it has no plans for a read-across of the RDR from the investment market to the mortgage, protection or general insurance markets. It also says that firms operating beyond the investment sector would be free to apply any new requirements for that sector across others.
Skandia attacks this approach and says it would give rise to inconsistency in decision-making between firms and could impact negatively on the consumer’s experience of the sales process.
Skandia strategy director Michelle Cracknell says: “A clear distinction between advice and no advice and absolute clarity for consumers around how much they are paying and for what services should apply across the whole market. In making the processes consistent and predictable it removes any feelings of distrust or intimidation that can spring from the fear of the unknown.”