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Watchdog looms over statements

Independent and tied advisers will have to provide clients with a statement of demands and needs for protection policies sold from January 14, 2005.

The new European and FSA rules on protection begin in January and if advisers fail to provide the statements, clients can complain and get up to 100,000 compensation from the Financial Ombudsman Service.

The rules, which form part of the Insurance Mediation Directive that is being incorporated into FSA insurance regulation, will require previously non-regulated intermediaries to have complaint systems in place by January 14.

Advisers will have to hand out documentation with their name and status and information on how this can be checked on the FSA register. They should also provide information on the range of products the firm can offer.

Scottish Widows marketing director Nick Kirwan says: “Advisers need to be ready for this and make sure that they are not learning from mistakes that they made 10 years before. Dealing with the FOS will be one of the biggest changes they will see and they need to ensure their advice procedures are rigorous from the start.”

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