Industry wants focus on service, not products - FSA (Published on IFAonline 11-04-07)
Initial feedback on the retail distribution review supports a move away from the focus on products towards the range of services which reflect consumer needs, says the FSA.
In an update on the retail distribution review, the Financial Services Authority (FSA) says some common views are emerging about the future shape of the market and the changes needed.
It states: “Overall, there seems to be some preference for a move away from the focus on products towards the range of services that reflect consumer needs.”
The FSA says the outcomes which could be achieved by this shift in focus might include:
- Services which are clearly defined and can be explained to consumers;
- Remuneration structures which reflect both the services provided and the responsibility of those providing the services;
- Standards of professionalism which are proportionate to the service offered and enhance the reputation of the industry;
- Products which are more transparent and, where appropriate, simpler and more accessible, reflecting consumer needs;
- Regulation which provides incentives for firms to treat their customers fairly and is proportionate to the risks presented; and
- Capital, liability management and other prudential requirements which result in sustainable businesses
Brett Davidson, Chief Executive of FP Advance, welcomes the fact the FSA is looking at broader remuneration options, but says advisers “with their head in the sand” should be worried.
He states: “Businesses that have already transitioned to the new advice model have nothing to fear, and those that have started the process are also likely to meet any prescriptive change timetable. The only advisers with something to worry about are those with their heads in the sand.”
The FSA will publish its conclusions and analysis of the proposed industry solutions in a discussion paper in June.
This article was first published by IFAonline, part of the Incisive Media group.
