View more on these topics

Warning that reviews flood will sink savings confidence

The head of the financial services practitioner panel is warning the Treasury and the FSA that the consequence of the present multitude of reviews could be damage to the economy and savings confidence.

Panel chairman Donald Brydon says too many reviews could distract management at a time when the industry is already being squeezed by falling equity markets.

He is calling for the conclusions of all the reviews to be considered together and warns that failure to take an overall view of the reviews could lead to industry confusion.

There are currently 10 rev-iews of the industry, including the Baird report, the Penrose inquiry and the Parliamentary Ombudsman review looking at Equitable Life. The Treasury has commissioned the Sandler review, the Pickering review and the Myners review.

The FSA has generated the depolarisation proposals, the Tiner review of insurance reguilation and the with-profits review. The Inland Revenue and the Department of Work and Pensions have instigated the review of the modernisation of annuities.

Brydon warns that the conclusions of these reports must be considered in relation to each other and says the cascade of reviews risks creating uncertainty among savers and stretching the resources of advisers.

He says: “There can surely be no other country which has subjected its savings industries to so many interlocking inquiries. The conclusions of all this study need to be considered together. If either the Treasury or the FSA act precipitately in relation to any one of these enquiries, they risk creating a jigsaw into which the final pieces may not fit.

“There is a risk that the law of unintended consequences may become operative rapidly, with resulting damage to the economy and confidence of savers.”

Recommended

Conundrum of charging for financial advice

There is one aspect of the defined-payment proposal which seems not to have received any airing.Consider the following:Two brothers of similar age live near each other, follow similar careers, earn similar amounts of money and retire at about the same time, each with a retirement lump sum of £60,000.Brother A consults his local IFA for […]

Ilog to continue IFA subsidy

The Independent Life Offices Group has confirmed it will continue its financial support of IFAs by providing an 85 per cent subsidy of IFA contributions to the Financial Services Compensation Scheme. Aifa has been in negotiations with ILOG on the issue for some time, as originally reported in Money Marketing in May. The FSCS levy […]

Emerging markets set to take off, says Gartmore chief

Emerging markets are finally about to take off after several aborted attempts, claims Gartmore head of pacific & emerging markets Phillip Ehrmann.Speaking at the Senate Programme in Monte Carlo, Ehrm- ann suggested that after several false dawns, emerging markets now represent great value and look poised to outperform developed markets in the next few years.He […]

Mortgage firms in tracker deal

Mortgage distributor Pink Home Loans has linked up with specialist lender Mortgages plc to offer a new range of base-rate tracker products. The Crystal mortgage range is a selection of tracker mortgages with a 1.5 per cent discount until August next year. Rates start at 5 per cent and are tiered according to loan to […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment