While insurers have welcomed the Financial Services Authority's (FSA) proposals to abolish polarisat...
While insurers have welcomed the Financial Services Authority's (FSA) proposals to abolish polarisation and implement menu-based advice, the Consumers' Association (CA) has branded the rules as misguided, suggesting it is just another example of providers trying to cash in on 'confusion marketing.'
With so many consultation papers floating around the financial services market it is no surprise consumers' groups fear the vulnerable public may be flummoxed by impending regulation.
The CA said this latest paper ' CP166 ' misses the point and will improve neither products nor services for consumers. It says the real issue that needs to be addressed by the market is better quality, not quantity.
Insurers have reacted positively to CP166, saying the menu payment system will give consumers more choice and advisers more flexibility. However, the CA does have a point. At the end of the day, it is the value people feel they get from their chosen product that makes the difference between a satisfied and an unsatisfied customer.
Although the benefits for insurers and advisers are easy to see, from a consumer's perspective it is just another change to get to grips with ' adding to their confusion.
Whether providers are using confusion marketing to push up costs is doubtful. Whether the FSA has missed the point that more choice does not necessarily mean access to better products is debatable. One point that is certain is the role advisers have in explaining regulatory changes to their clients has never been more crucial.
Kirstie Redford, editor
