Ron Sandler says the FSA's refusal to provide a clear definition of misselling will lead to more scandals which will damage the industry.
At a financial sector joint industry group fringe meeting at the Labour Party conference this week, Personal Finance Education Group chairman Sandler hit out the regulator's inability to provide an easily understandable definition of what misselling means.
Sandler, author of the rev-iew of the medium and longterm retail investment market, said that without a clear definition from the regulator, the market would continue to by mired in misselling scandals.
FSA managing director (retail markets) Chris Briault said his view of what constitutes misselling was advising people to buy products that were clearly unsuitable for them or direct marketing that is an unfair or unclear financial promotion.
But Sandler warned against taking a rose-tinted view of the industry, predicting more misselling problems in the future. He attributed some of the problem to a sales process that works on vague principals such as know your customer and suitability.
Briault said a clear line was drawn in the Financial Services and Markets Act outlining where consumers must take responsibility for their purchases and where responsibility for providing information rests with the provider.
But Sandler said the FSMA was so opaque that it was imp-ossible to tell where caveat emptor lines were drawn. He said: “No one at the FSA is prepared to define misselling so no one knows how close they are walking to the cliff edge and inevitably there will be more misselling scandals.”