The Financial Services Authority's decision to keep in place rule RU64 has prompted a mixed response from advisers.
While some say they are disappointed by the decision, others say it was having little bearing on their businesses regardless.
However, the regulators original indecision over RU64 angers some advisers who say they’re “not quite sure what’s going on”.
The rule requires advisers to state why the product they are recommending is at least as appropriate as a stakeholder pension.
In May 2006, the FSA announced the final decision would be delayed until details of how personal accounts would work became clearer, but a consultation paper in October on ‘Reforming Conduct of Business Regulation’ further delayed the issue.
It stated at the time it did not expect to announce the final decision on RU64 until the early part of 2007, providing there is “sufficient detail available at that time about the new national pension scheme”.
Today’s decision has surprised some advisers.
Keith Jarman, director of Hughes Carne IFA Ltd, says: “I’m disappointed. Yet again the government has said one thing and then backed down. We sit here not quite sure what’s going on.
“The fundamental reasons for the rule were sound enough, and I don’t have a problem with that.
“But it wasn’t long ago that the government said that they were taking the rule away. Now they’ve said they’re keeping it. It wouldn’t surprise me if they changed their minds again, to be honest.”
Danny Cox, head of finance practitioners at Hargreaves Lansdowne, says the decision won’t change a thing.
“We have had it (RU64) for so long now though that it won’t make that much difference. I’m not wholly convinced that it’s actually achieving a huge amount.
“Why have one rule to say you have got to specify why you would recommend one product over another, but then not have that apply to other types of products, like bonds or unit trusts?”
However, Peter Vicary-Smith, chief executive at Which? says: “We are delighted to hear the decision of the FSA Board to retain the rule known as RU64. This offers important protection against inappropriate pension sales.
“It is excellent news for consumers, giving them the confidence they are being given the full picture about which pension product is right for them, guarding against any mis-selling between now and 2012.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Scott Sinclair on 020 7034 2636 or email [email protected].IFAonline
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