The Financial Services Authority's (FSA) latest tactic towards product providers looks as if it coul...
The Financial Services Authority's (FSA) latest tactic towards product providers looks as if it could be a worrying precedent in its future relations with intermediary firms.
The regulator is keen to ensure its comparative league tables of unit trusts, Isas and pensions are a success and that the product providers appear to be enthusiastic supporters.
As a result, it has said that providing information is voluntary but anyone who does not will be named and shamed on the consumer-oriented tables.
No doubt the FSA wants to look like a consumer champion but it is in danger of being the playground bully.
If the regulator is going to act like this towards large life offices then that is nothing to what it could do to intermediary firms.
The issue is not about league tables ' the fact is, they are on the way and the industry is going to have to get used to them ' it is about the way they are being implemented. It looks as if the FSA's ideas not only have to be implemented but must receive a 'voluntary' and 'enthusiastic' response from the industry.
If it wants to bring in comparative tables then it should make them compulsory. If the tables work well and the industry had been unenthusiastic then that is one point up for the regulator.
The product providers and, in particular, the life industry, have not exactly been helping their own cause.
Take the ABI's raising standards project, which is looking at providing more clarity to consumers on life, pension and investment products. While it says it is working hand in hand with the regulator on its many goals, it has decided the use of reduction in yields (RIYs) is a perfectly acceptable method of explaining to consumers the effect of product charges.
Groups looking to be accredited will need to provide five, 10 and maturity RIYs in all of their product literature.
At the same time, the FSA has decided these are too complicated for consumers and has decided to drop them from its comparative information tables.
This much confusion over a simple comparative information table does not bode well for the future of an organisation trying to promote the virtues of self-regulation and close co-operation with the regulator.
Three years at Wells Fargo
Effective from 9 December 2019
One firm with permission suspensions left
Continuing the Architas education series for clients.
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