Ron Sandler has launched a blistering attack on with-profits policies, slamming them for lacking transparency and offering poor surrender values.
He has also savaged fund managers, questioning their investment objectives and accusing them of viewing good marketing as more imp-ortant to sales than investment performance.
The role of the Government as a regulator of product design has also been included in the consultation, questioning what effect these regulations have on the market. Sandler asks how Catmarked products have affected the industry and what impact they have had on competition.
But it is with-profits which will be the focus of his attention on providers. He plans to investigate why sales of with-profits bonds continue to be successful despite the amount of criticism of them in recent months.
In the report, Sandler says: “Nor is it entirely clear whether consumers' wish for reduced volatility through investment in with-profits policies is economically sound.”
He also called into question the organisational structure of product providers, which the report suggests acts to complicate how investment objectives are set and measured.
Questions which Sandler believes demand answers include how providers set investment objectives for individual markets or fund managers.
CIS spokeswoman Alison Richardson says: “We believe with-profits remains the right choice for many people. There is still very much a place for them. The criticisms are fair in some circumstances but the industry has gone a long way to address them.”
Threadneedle communications director Richard Eats says: “We would disagree with the idea that you can market a fund successfully without reasonable investment performance. We would not offer a fund if we did not think it would make sense and we could market it.”