By Kira Nickerson Intermediaries will no longer have to send out post-sales key features documents f...
By Kira Nickerson
Intermediaries will no longer have to send out post-sales key features documents for life assurance products if recent FSA proposals are accepted.
The authority is currently consulting on its source book, which sets out its stance on a number of industry issues, including the presentation of key features documents.
Under the existing regime, advisers must issue customers a second set of key features confirming those issued at pre-sale, but this only applies to life assurance products.
Collective investment schemes have never had a requirement to send post-sale key features.
The authority believes dispensing with post-sale confirmation would not result in the loss of any consumer protection and will create a savings for product providers.
It estimates the industry could save around £35m annually in compliance costs if this was to be eliminated.
Other proposed changes to key features include the ability for intermediaries to provide the documents by email, fax and the internet, rather than the post.
The FSA states firms which produce key features by electronic means may not need to follow up electronic delivery with printed hard copy.
The documents may also be simplified by the removal of total actual deductions.
Currently key features must list the premiums, total actual deductions of charges, the effect of charges and the surrender or transfer value of the product.
Andy Frepp, marketing director at Scottish Widows, said: "The calculation of the total actual deductions is quite complex and no one understands them. This will simplify the information and make it much easier for everyone to understand. The presence of the effect of charges will be sufficient information for investors. The more complicated the selling process is, and the more variables there are then investors are more inclined to change their minds."
The FSA agrees, noting its recent consumer research has shown too much information can often deter people from actually reading it.
At the same time as the FSA is consulting on the presentation of key features, the regulators have also issued an update to give guidance to product providers on the presentation of key features information on website and internet-based fund supermarkets.
Firms will no longer be required to design their sites so that the investor is required to read through the full text of the key features document before being able to access and complete the application form on-line.
In future, firms may also design their sites so as to encourage the investor to visit the document and when an investor reaches the application form portion of a site they should be provided with a reminder and a link through to key features.
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