The Consumers' Association has branded consultation paper CP166 ' the Financial Services Authority's...
The Consumers' Association has branded consultation paper CP166 ' the Financial Services Authority's (FSA) proposal to abolish the polarisation regime ' as simplistic and misguided.
Mick McAteer, senior policy adviser for the Consumers' Association, said: 'We have said all along the FSA's determination to abolish polarisation misses the point. These proposals do not address the real problems in the financial services industry. Instead they will introduce more confusion in an already complex market under the guise of more choice.'
However, the overall response to the consultation paper has been positive.
Alan Woods, head of life and pensions for the Association of British Insurers (ABI), said: 'These proposals represent a sensible liberalisation of the market which will improve customer choice. It will also give customers clearer information about the cost and nature of advice.'
Many market commentators have endorsed the FSA abandoning proposals for a defined payment system for IFAs. The regulator will now consult on how a 'menu' card can be used to explain to customers their choice of how to pay for financial advice.
Peter Hales, sales and marketing director at Norwich Union, said: 'It is encouraging to see the FSA supporting IFAs through its decision to opt for the menu approach. This should enable IFAs to choose an operating model that suits their clients, and their own firm's business circumstances.'
Roger Edwards, products director at Bright Grey, also agreed with the menu approach: 'Many people think come 2004 there will be changes, but in reality, with Statements of Best Practice from the ABI and all insurers disclosing key features and commissions, there is not much that will be different, especially for customers, with the exception of new multi-tied advisers. The industry has been run as if it was regulated anyway.'
