Adviser firms wishing to use the FSA's new ‘simplified' disclosure document could find themselves having to wade through up to 60 explanatory notes before they can construct their consumer guide.
This morning, the FSA released a policy statement giving an outline of the new disclosure documents (these offer guidance for IFAs who also have the option of constructing their own documents) which investment advisers can use as a replacement for the Menu and IDD .
There are two document templates given at the end of the policy document in the section marked Final Handbook Text:
(a) for advisers just doing investment business (from page 12 in Annex 1)
(b) the combined document for advisers doing investment and other business (from page 26 in Annex 1)
However, although the final documents which will be given to consumers should be relatively short, advisers must work through 39 explanatory notes for option (a) and 60 explanatory notes for option (b) before they can produce the final document.
The FSA says the explanatory documents are long as it wanted to cover all bases.
A spokesman says: “We wanted to give guidance so advisers can do their own thing and there may be some options they don’t like so they can take these out.”
The spokesman adds although it may take time at the beginning, once the adviser has constructed the new document it should be much clearer and more straight forward.
However, one adviser who contacted IFAonline after looking through the policy document expressed his concern the final documents for consumers could be too long as advisers were unsure what to include.
“This looks like anything but simplified. Advisers will put more in the documents to make sure they have covered their own backs,” he says.
“Most clients don’t look beyond one page of a document anyway and you also have to compare it with the length of the document they would get if they went to a bank or building society.”
Advisers will be able to use the Menu and IDD until August 31 2009. The new Services and Costs Disclosure document will be available for use from August 6 2008.
Have Your Say: Are you going to use the FSA’s template and notes for the new disclosure document or will you make your own?
F&C IT's 150th anniversary
First meeting for Powell
Red tape and tech driving consolidation
2019 Survey opens in June