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Paying for financial advice should be made more transparent and easier to understand, according to the ABI’s submission to the FSA’s Retail Distribution Review, published today. The insurance industry’s innovative proposals to reform financial advice include:

• a level of professional qualification which would be the minimum to allow financial advisers to give advice;
• the introduction of a new system of paying for advice that would replace traditional commission, called Customer Agreed Remuneration; and
• a new regulated sales process called ‘Assisted Purchase’ to help more people get affordable access to simpler financial products.

Maggie Craig, the ABI’s Director of Life and Savings, said:

“The system of paying for financial advice needs to be improved. It is in the interests of customers current and potential, advisers and product providers to raise standards of service and professionalism, and to be clear about what advice is and how it is paid for.

“The insurance industry will continue to work with the FSA and others throughout 2008 as it considers all the ideas the FSA has received and puts in place final recommendations. We are confident that together we can build on the Discussion Paper to develop constructive proposals.

“We will require a strong partnership between the industry and the FSA to ensure that they are implemented.”

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Notes

Notes for Editors

1.            Enquiries to:       

         Alan Leaman    020 7216 7440 (Mobile: 07957 482 330)

         Jonathan French   020 7216 7392 (Mobile: 07958 330 480)

         Malcolm Tarling    020 7216 7410 (Mobile: 07776 147 667)

         Erfan Hussain       020 7216 7411 (Mobile: 07712 841 184)

         Kelly Ostler        020 7216 7415 (Mobile: 07968 364 302)      

2.            The ABI’s response to the Retail Distribution Review is available by clicking on the link below.

3.            The ABI is the trade association for Britain’s insurance industry. Its nearly 400 member companies provide over 94% of the insurance business in the UK. It represents insurance companies to the Government, and to the regulatory and other agencies, and is an influential voice on public policy and financial services issues. ABI member companies hold up to a sixth of all investments traded on the London Stock Exchange, on behalf of millions of pensioners and savers.