The FSA has stated that ‘guided self-help’ (Option Two) is its preferred approach to the selling regime for these products.We prefer ‘focussed advice’ (Option Three) as we believe that this method makes it more probable that consumer and adviser will have a common understanding of the basis of their contact and of the nature of the advice given.When the one per cent price cap was fixed with the creation of stakeholder pensions, Pest Inspection Report the assumption was that distribution without the need for client specific advice, would be avidly taken up by consumers.
The essential role of intermediation and advice has become much clearer since the introduction of stakeholder and is much more widely acknowledged by the authorities.AIFA has argued that any price cap set for the new stakeholder products should reflect thisThe one per cent all-inclusive charge does not accommodate the cost of advice and will simply ensure that products are not taken up by those at whom they are targeted.The Treasury has decided to carry out more research before reaching a final decision on this. We await their findings with interest!
The FSA published a definition of mis-selling in line with the Sandler Review’s recommendation in early 2003.It is rather more detailed than expected but states that the regulator is not in the business of revisiting decisions made in the past under different rules and circumstances.Advisers have for some years been under the impression that mis-selling means exactly what a regulator may with the benefit of hindsight decides it means.There have been welcome signs that the risk-based approach of the FSA is moving toward a more reflective and proportionate attitude; but the defining of mis-selling should be taken forward with determination by the industry.
Whilst we had some criticisms about the framework’s lack of clarity, overall we supported the introduction of a broader and more in-depth set of examinations.If implemented, these should expand the knowledge and, consequently, the perceived professionalism of the IFA community.The new Skills Council will now be taking this initiative forward and we will be actively following the development of the new framework.