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Spectre of RU64 looms again for Sandler suite

The FSA has not ruled out compelling advisers to justify recommending a non-stakeholder suite product once the new range is launched next year.

It has said it will not apply an RU64 style regime to the medium-term investment element in the run-up to their launch but it will consult on whether to apply the rule once the products hit the market.

RU64 forced advisers to justify their decision to choose a product other than stakeholder pensions in the run-up to their launch and was replaced by COB 5.3.16 once the pensions came to market.

COB 5.3.16 looks set to remain in place for stakeholder pensions unless the consultation decides otherwise. This has raised concerns from the industry and the ABI, which is currently preparing a short paper on the case for the abolition of COB 5.3.16, proposing to replace it with a disclosure-based alternative.

Royal London head of corporate communications Alasdair Buchanan says: “It looks really odd the way things are structured at the moment.

“The FSA is saying that for non-pension products there is a clear distinction between stakeholder and non-stakeholder and you do not need to take account of one if you go down the other route. It is not clear why it still applies for pensions or why we have to go through further consultation for pensions.”

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