Latest feedback from the FSA and the industry about plans for "Sandler" suite of stakeholder product...
Latest feedback from the FSA and the industry about plans for "Sandler" suite of stakeholder products suggests consumers should look at the individual's debt levels and the amount of life cover or other protection they have, before even attempting to select other products through filtered questions.
Although little detail is given at this stage by the FSA on the process that consumers might have to follow when selecting products from the "Sandler" suite of stakeholder products, initial indications are that FSA expects cover or debt management to be a priority over other products or financial requirements.
The FSA says there ought to be "mechanisms to prompt consideration of debt management requirements and protection needs (such as life insurance for consumers with dependents)".
"Option 1 looks increasingly difficult as the European debate progresses on relevant position of the Investment Services Directive. Option 3 has the potential to be used as the sole approach or as a complement to Option 1 or 2," says the FSA.
As a result, the FSA is now looking at the questions that might be asked through Option 2 "guided self-help" route, to assess whether there should be different types of questions and processes are required depending on the products.
This could complicate matters considerably as the original aim of the Sandler suite and process was to simplify advice and products so consumers might be able to reach conclusions on their own.
That may not be the final outcome, suggests the FSA, as the first of the three proposals in DP19 - Self help for consumers, followed by guided self-help and focussed advice - may not eventually be possible, because the Investment Services Directive may not allow it.
Other considerations relating to Option 1 suggest that there are real concerns from the industry that consumers will not understand the full risk implications unless they are pointed out by an intermediary - as might be considered under Option 3 - because consumers tend to gloss over the complexities.
Other providers also said they were concerned about the manner in which consumers are required to sign a self-certification document because this would not provide sufficient protection against claims of mis-selling.
Equally, there is still concern - considering earlier FSA research on stakeholder pensions - that a consumer sufficiently understands the difference between information and advice.
The FSA says it is difficult to set any kind of guidelines at this stage as other related documents, from the Inland Revenue, the Treasury and the DWP are due for publication.
Additional consultations on Sandler processes are expected from the FSA later in the year, as well as plans for with-profits Sandler products in the autumn.
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