The Association of Financial Mutuals (AFM) has welcomed the FSA's exemption of Holloway protection products from the Retail Distribution Review (RDR) but said the ‘limited' concession does not go far enough.
Responding to the decision announced in the regulator's quarterly consultation, Martin Shaw, chief executive of AFM, explained that it was a good start but the full impact of the exemption needed to be studied.
"The FSA's proposal to exempt some Holloway products from the RDR is a welcome albeit rather limited concession," he said.
"It would mean that post-RDR an independent adviser would be able to compare Holloways on equal terms with other forms of income protection. For these products at least the FSA recognises that adviser charging would be a barrier to fair competition.
"We will be responding constructively to the consultation once we have fully assessed the possible impact and what conditions - such as also exempting Holloway from packaged retail investment products (PRIPS) - are essential to ensuring the exemption is effective," he added.
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