Saltr the earth

Everyone would agree that the retail financial services industry needs to

create confidence in its products among consumers. This means having high

standards and living up to them.

In the insurance industry, work has been in hand for some time on a series

of initiatives to raise standards. For exactly the reasons given above, it

is important the industry should be seen to have been involved in this

task.

Agreeing higher standards is never easy. They need to be challenging

enough to show consumers, the regulator and the Government that the

industry is making a real difference. But they must not be so difficult and

costly to achieve that an unnecessary and unwieldy burden is placed on the

industry.

Getting that balance right involves a lot of hard work and there must be

an element of compromise. But the key point is that any package of

standards must be something around which the industry can unite in order to

restore confidence and develop the market for the consumer&#39s and industry&#39s

benefit.

The Savings and Long Term Risk initiative – Saltr – exemplifies this. After

an extensive consultation with the industry, IFAs, the Government, the FSA,

consumer groups and consumers themselves, a new set of industry standards

is emerging and will soon be finalised, ready for the introduction of a

voluntary quality mark scheme for long-term savings brands.

One of the key priorities has been to ensure the IFA comm- unity has been

fully involved and consulted on standards. This was the job of the IFA

taskforce, chaired by Aifa director-general Paul Smee. The taskforce

consulted widely among IFAs and made a range of recommendations, which have

all been accepted in full.

The aim was to ensure the new standards would be truly

distribution-neutral and that IFAs would not be burdened by unnecessary red

tape. Changes have been made to the draft standards to ensure the new

regime is fair to IFAs and is workable and practical.

I was pleased that the taskforce concluded its report by saying: “As the

initiative is set up with the interests of customers, not providers, at its

heart, this should be good for confidence in the whole industry and good

for business. It should help restore the image of the whole sector with

audiences such as the Government and the FSA.”

We have also been consulting widely with the indus-try. A programme of

Saltr workshops has ensured that all ABI members and other providers of

pension, protection and investment products have had the opportunity to

have a full briefing on the content of the standards as they stand. The

next workshop will take place this month.

We have made important progress on the establishment of an accreditation

board to oversee the standards regime, accredit brands which meet the new

standards, award a quality mark to such brands and monitor compliance. The

announcement of both the chairman and chief executive will take place soon

and I am confident the industry will welcome the appointments.

We are also moving forward on appointing the members for the accreditation

board. These will have an important role to play and it is essential that

the board is, and is seen to be, independent of the industry. For this

reason, none of the members will be current industry practitioners.

As for the future, we hope to be able to agree the standards and publish

them very soon. Work will then continue on the establishment of the

accreditation board and on the design of the quality mark that accredited

brands will be able to use if they have met the standards.

Later in the year, we aim to launch the accreditation board and the

quality mark formally. Applications for accreditation will then be invited.

We hope the first accredited brands will be announced in autumn 2001.

We feel we have made enormous progress in a short period of time. I have

been impressed by the commitment shown by a large number of leading

companies to the Saltr concept and am grateful forthe huge amount of

effortthey have put in to developing the standards.

The prize of better infor-med and more confidentcustomers is one which

should benefit everyone.