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Skandia wants FSA crackdown on charges&#39 disclosure

Skandia is calling on the FSA to produce a watertight set of disclosure rules for all product types, as it claims many providers are “camouflaging” and manipulating charges.

It wants to see a tightening of the system for all products to prevent providers having room for discretion in what they disclose and is urging IFAs not to accept quotes in key features documents at face value.

The company says reduction-in-yield figures on with-profits bonds need to be tightened up as they can mask the true costs of the product to the consumer.

It wants fund supermarkets to be included in the disclosure regime, saying many advertise annual and initial charges, ignoring dealing costs on buying and switching units.

Skandia says investors can be duped into thinking that fund supermarkets provide a free service without realising supermarkets take a share of the annual charges of the underlying investments.

It says abuses also exist in the self-invested personal pensions market, where point of sale documents often lack det-ailed information on fees.

Skandia says reviews on disclosure have become bogged down in simplifying the presentation of charges and the effects of inflation and a more radical step needs to be taken.

Head of marketing Peter Jordan says: “Many of these problems arise because the absence of a specific set of tailored rules has encouraged too many to place their own interpretation on the regulations to achieve competitive advantage.”

Jordan article, p16

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