Consumers may soon be able to receive 'basic advice' on the government's suite of stakeholder products after the FSA today revealed it is to consult on proposals to introduce a simpler and lower-cost advice regime.
In its consultation paper 04/11, 'A basic advice regime for the sale of stakeholder products' , the FSA suggests the proposed regime would make it easier for all consumers to have access to "risk-controlled" products, such as stakeholder pensions, while at the same time receive a certain level of protection.
At present, the proposals will be limited to stakeholder products, the regulator says.
Further down the line, however, the basic advice regime may be extended to include other products as well, says a FSA spokeswoman. This would include "fairly simple" packaged products such as Isas, she adds.
AIFA director of public affairs Tracey Mullins says "the basic regime is fine for simplified products" but cautions it would not be suitable for more complicated ones.
Under the current proposals set out by the FSA, companies using the 'basic advice model' would have to ensure the products recommended are suitable for the customer. Firms and sales people would also have clear limits as to the issues on which they may advice.
Furthermore, firms must be FSA-authorised and are required to ensure their staff are competent enough to "administer" basic advice, by training and supervising them.
Clive Briault, manager director of the FSA's retail markets business unit, says: "The FSA supports the aim of making it easier for all consumers to have access to stakeholder products and is committed to developing, if possible, a sales regime for these products that achieves this without compromising consumer protection.
If implemented, these proposals would provide a new option for consumers who may want to buy the stakeholder products but currently have to choose between taking detailed financial planning advice or buying without any help at all," he adds.IFAonline
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