The Treasury is warming to the idea of developing 'simple' products which advisers would then be required to use as benchmarks for their recommendations.
In its consultation paper, it said the RU64 rule introduced as part of its 'stakeholder' initiative for pensions - which required advisers to justify why a non-stakeholder pension was more suitable than a stakeholder pension when recommended to clients - had benefitted the market, mainly by reducing overall charges.
Stakeholder products, which were later extended to child trust funds and ISAs, introduced compulsory standards on charges, access and terms for any product wishing to be designated ‘stakeholder'.
But while the Treasury will stop short of price capping 'simple' products, it said it "would like to explore" how the principle behind RU64 could be introduced with the new regime of simple products.
The government announced in July 2010 that it wanted to see a new range of simple financial products launched. It said these would help people take responsibility for their finances and make better choices.
Today, it said it had put together a steering group tasked with developing the products, chaired by former Lloyds Banking Group chief risk officer Carol Sergeant.
Responses to a government consultation on simple products suggest the group should initially focus on simple deposit savings and protection insurance products.
Other areas likely to be considered include investment products to help consumers save for the long-term.
A Treasury spokesman said the response to the consultation document provides just a summary of views expressed in the consultation and the Government has not come out on any side.
It added it will be for the steering group to work their way through all the points raised.
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Launching later in 2019
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