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Scottish Mutual backs FSA&#39s big issue on with-profits disclosure

The latest FSA with-profits issues paper is pushing at an open door, says Scottish Mutual.

The life office says providers already accept there are big problems with consumer understanding and confidence about with-profits products.

It says many of the proposals suggested in the FSA paper, Disclosure to Consumers, were originally raised by the ABI several months ago. The ABI has confirmed that it worked closely with the regulator in developing the disclosure proposals.

Scot Mut pensions development director Leslie Gray welcomes the FSA suggestions of 31 points of information that consumers should be provided with at point of sale and a further 13 points it feels should be provided regularly after.

He says it makes sense to have two levels of information as not all consumers want the same amount of detail about the products they are investing in.

Gray says: “To succeed in his review, Howard Davies will have to ensure that consumers are not turned off with-profits by the information they receive, especially if this means that to minimise investment risk they invest in poorer performing investments.”

“Equally, he will have to ensure the final disclosure requirements are such providers do not feel the overhead of providing this information will make with-profits unattractive to sell thus reducing choice and competition.”

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