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Wary Aifa doesn’t want it to end in tiers

The Newcob consultation has met with a mixed response, with Aifa cautious about its implications and Which? calling for a cost-benefit analysis.

Aifa deputy director general Fay Goddard supports the concept of a principle-based regime which will provide advisers with greater flexibility.

But she says Aifa is concerned about the vacuum created by the move to principles and says the body does not want to become a second-tier regulator.

She says there is also the worry there could be conflicting or inconsistent guidance from a number of sources with trade bodies, professional institutes and compliance and legal consultants looking to fill any gap. Goddard says Aifa does not want changes which incur costs for firms while not providing extra benefits to consumers.

Goddard says: “There will be different ways in which firms operate but, provided the outcome is satisfactory, the FSA will have to accept these different processes. The regulator needs to demonstrate to the industry that it will be able to do this, otherwise firms will lack confidence in determining how they will apply the principles to their individual businesses.”

Spokeswoman for Which? Helen Ainsworth says the FSA has not proved that scrapping the current rulebook will benefit consumers.

Which? has called on the regulator to conduct a full cost-benefit analysis but FSA chief executive John Tiner told a Treasury select committee meeting recently that such an analysis was not possible.

Ainsworth says: “The FSA has not shown how this will act in the consumer’s interest and we are worried that scraping prescriptive rules could leave consumers with less protection.”

The ABI welcomes the paper, particularly the commitment to less burdensome adverti- sing rules, encouragement for industry-led action and the taking principles forward into the reviews of distribution and advice.

ABI director general Stephen Haddrill says: “Consumers and industry need a regulatory regime that ensures fairness without creating unnecessary cost. We hope the FSA’s propo- sals are the start of a vital move towards principle-based regulation in the retail area. It should deliver benefits for the consumer and the industry”


Watchdog says a nod is giving advice

The Financial Ombudsman Service has warned that something as simple as a nod could be construed as advice during the non-advised sale of a protection product. Lead ombudsman for insurance Peter Hinchliffe says customers often ask questions which relate to the suitability of a policy when buying through a direct sales channel and a nod […]

Sesame members get new website builder service

Sesame has launched a website builder service for advisers either launching a website for the first time or those wishing to improve their existing ones. With a 200 per cent increase in the number of websites being created by adviser firms over the last two years, Sesame says advisers need help with streamlining their compliance […]

CETA launches MPPI product

General insurance network CETA has teamed up with Cardif Pinnacle to launch a mortgage payment protection insurance product which will be sold through CETA’s 16,000 members. The product has been developed to try and address the concerns raised by the Office of Fair Trading’s report into the PPI sector.Premiums start from £2.20 per £100 of […]

Ocean Finance makes waves with IRS equity-release deal

Ocean Finance has entered the equity-release market in a deal with product provider In Retirement Services. Ocean, which is best known for its daytime television advertisements for debt consolid- ation, will introduce business to IRS rather than advising clients itself. IRS, which is considering plans to launch its own series of TV ads next year, […]


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