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SANDLER FORUM: Chance to voice concerns

With all due respect to the Government, the fact that a 1 per cent price cap is simple to convey is no basis for reforming a sector.

Money Marketing this week launches the Sandler Forum in a bid to investigate the implications and the possible downsides or positives of the stakeholder suite and the Treasury reviewer in chief Ron Sandler&#39s other proposals.

There are some deep industry misgivings about Sandler, most particularly about his plans for low-cost stakeholder products.

Treasury financial secretary Ruth Kelly has made it clear that the products have the full backing of the Government.

Her view that the 1 per cent cap is easily understood and simple to convey and communicate would very obviously be met with the industry cry that Sandler&#39s suite will be difficult to sell.

These views may begin to test the popularity of the most approved financial services minister in a long time although, no doubt, Kelly

is personally more concerned with the voters&#39 opinions. But if this reform does not work amid massive concerns about pensions and savings from the public, there may be a political price to pay after all.

There is, our readers tell us, a desperate need for the industry to begin to put across some of its misgivings in more detail, with research to back up their concerns. So that is what we will aim to do.

The Sandler Forum, which will run on the news and features pages of Money Marketing in the coming weeks and months, will provide a place for views on Sandler to be aired both from the pro-, anti- and even the somewhere-in-between camps.

At all stages, we will, of course, allow the Treasury, the FSA and Sandler himself to respond, particularly where their views are clearly under attack, but whatever the arguments in the interim, at the end of the series, we will collect together the industry views, list the main areas of concern and aspects of the reform where we believe the Government should think again.

We will challenge the Government to justify what it is doing before the policies are put into practice.

The Sandler Forum will seek to highlight areas where both the public interest and the profitability and even the viability of the financial services industry could be harmed and whether the possible benefit to consumers makes it worth the price.

Money Marketing will also attempt to determine if the existing Catmarked and stakeholder products are working. At the moment, the answer changes depending on who you ask. But it will also attempt to apply the lessons of the past few years to the future.

The Sandler Forum will see Money Marketing do much more than simply oppose Sandler&#39s products. As a newspaper, we generally oppose price-capping because we regard it as a very blunt regulatory instrument that can lead to all manner of unintended consequences for the market.

But it would be far too simplistic to simply oppose any moves by the Government or the FSA in this area. Although Money Marketing prides itself on being a campaigning newspaper, this is not an outright campaign – at least not yet.

Of course, if the concerns are ignored, it may turn into a campaign but as the regulator in particular has started to find its feet following N2, we think the industry&#39s views are less likely to be ignored than in the past.

But where good motives are based on misplaced assumptions or where reforms are based not on research but on past prejudice, we will provide a platform for the industry and other bodies either to warn of the consequences and put their concerns on record in detail or, if they are in support, to say so.

Money Marketing welcomes the participation of all its readers in the Sandler Forum.

The five objectives

1. To explore the consequences of price capping and product regulation where it has been employed in the UK with the existing stakeholder and Cat standard products and elsewhere in the world

2. To allow the financial services industry and other bodies to put any concerns or voice support for the Sandler proposals on the record and in detail

3. To attempt to clarify the legal and regulatory impact of reforms for those operating in financial services and those buying its products and services

4. To examine the economic case for reform and what impact it will have on the savings gap

5. To ask the Government and the regulator to justify what they are planning before implementation

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