Several changes have been made to the format of the actual advice menu since proposals were last laid out following feedback from the industry, reveals the FSA.
Amendments have been made to the title, position and format of the 'keyfacts' logo, as well as the regulatory message and general wording - which now focuses less on the sale of a product - and new headers have been added to break up the menu and distinguish between different types of products.
Sections 1, 2 and 3 all still required to fit onto one page to give a background summary about the FSA and the firm's own services, as well as explain the firm's commision and fee payment options.
Advisers firms are then required to agree the payment options "before a customer becomes liable for any payment" and do so "in their own words, concisely, in plain language" and in the space allocated on the menu template.
The following product groups must now be included in the menu:
Long-term care policies are the only category to have been removed from the original product selection, because the products are not considered sufficiently mass market, along with protection products as they are alredy subject to a different disclosure regime.
The FSA says it has left protection products off the menu as including them would give general insurance firms the competitive advantage and would result in different disclosure requirements on the same products.
The FSA has also picked up on other comments from previous responses and excluded group stakeholder plans from the menu.
Calculations used to assess the net present value (NPV) used on commission disclosure are still extremely complex and would require a lot of work from advisers to keep them up-to-date - see pages 125-129 of Annex 1, then listed as COB 4 Annex 7 R to view the list of calculations and assumptions - so the FSA is in the process of placing data on the next handbook CD as well as build a calculator tool.
Market average commission data still appears to be flawed somewhat - see other IFAonline stories on the menu for more information - but the FSA says it still believes it is best the FSA collects data from providers, but will not include information of rebated commission as its evidence suggests this occurs little.
In situations where the menu has already been presented and charges then go up, the firm is required not to charge more than what was disclosed as its maximum, so would be required to present a new advice menu, on the prior agreement with the customer.IFAonline
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