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Next steps
So where do we go from here?
Well, officially, the line is that a ‘Feedback Statement’ will be issued in October 2008, containing an analysis of the responses to the Discussion Paper, comments on the market features the FSA expects to deliver through regulatory change along with how the changes may be implemented and a timetable.
In the meantime, the report highlights key challenges and areas of debate it wishes the market to consider. The figure below is from the Interim Paper and demonstrates the uncertainty there is over where exactly the line between Advice and Sales can be drawn.
The Future of retail distribution: can we deliver a simpler landscape?
Note: size of shapes is not representative of desired relative levels of consumer take-up.
The three key challenges from the FSA to the market are:
- Product providers to change their business models so that they do not determine how much advisers are paid.
- The industry to develop and implement an agreed common framework for professional standards.
- Help in defining the Sales channel. Namely, firms to present propositions to the FSA for new sales services and make the case for FSA action to help implement their ideas for consumer benefits.
Finally, the FSA did point out that there were some issues they were going to consider further. One of these is providers buying stakes in distributor firms. This may be a proverbial “cat among the pigeons” for some of our peers. Also, we’re pleased to note, was recognition of the adverse impact that preventing further commission payments after a product sale can cause, even if the customer is instigating the request.
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Conclusion
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