UK consumers were never consulted enough about the Financial Services and Markets Act 2000, and the ...
UK consumers were never consulted enough about the Financial Services and Markets Act 2000, and the time has come to redress that balance in terms of the current debates on depolarisation, the Pensions Green Paper and other aspects of personal finance, says Vincent Gable, the Liberal Democrats spokesman on trade and industry.
Referring to three areas in particular, Gable says that the Tory government in power when the changes introduced by the FSMA 2000 were first mooted were far to influenced by links to the City.
Subsequently, the FSA has been found lacking in supporting the consumer on issues such as Equitable Life, endowment mis-selling, and split capital investment trusts, he says.
"There is no political outlet for serious discussion involving the consumer's view. The government has managed to distance itself from the issues by using the FSA. That is not good enough."
"We see three key issues."
"Depolarisation is of concern because it is not clear what will happen to the 'independent' in advice."
"Generic advice proposals are coming as mixed messages from the government. Does this mean 'free' advice involving Citizens Advice Bureau, or does it mean advice being supported by the banks? And what about the funding of such advice: will it come from the whole industry or just the providers?"
"Third is simplification. This raises questions of suitability and whether simplified products will be outside the remit of the FSA and so not covered by compensation schemes."
Gable is set to grill at least one treasury minister later today - who is not yet known - on what exactly are the government's plans to reshape the market for personal finance in the UK.
"It is well established that in order to get the savings rate up people need advice to encourage them to do so. The problem is the growing gap between the rise in demand for services and advice and the availability of these. I'm not talking about nationalising an industry, but the government does need to work out how it is going to help create a market. Price controls are obviously part of the discussion on this, although in the wider context of consumer views and the three issues already mentioned."
Whatever the answer from today's questions to the government, Gable says the feeling is that consumers' views have not been heard enough in Parliament and that the weight accorded provider and practitioner views may be less in future.
Taking the time to look
After 14-month FAS programme
More than half of people over the age of 55 see financial security as a top priority in retirement, yet a third allocate more time to buying a new car, research from Legal & General (L&G) has found.
Rebranded from OMW
Number of benefits