FSA decision on RU64 is good news for consumer protection

26 February

The Consumer Panel today welcomed the FSA Board's decision to keep in place the rule known as RU64, which requires financial advisers to tell clients about the existence of low cost stakeholder pensions when advising on pensions generally.

The Consumer Panel had advised the FSA and its Board that the promotion of the simple pension with the lowest charges – the stakeholder – to those who most needed it, would not happen unless advisers had a specific direction that they must highlight its existence to consumers for whom it is most suitable.

The Chairman of the Financial Services Consumer Panel, John Howard said:

"This is a good decision on consumer protection from the FSA. Recent research showed that advisers do not always recommend products which provide limited or no financial gain to them, and abandoning the requirement to point out the existence of stakeholder pensions could have led to misselling especially in the run up to the introduction of the new National Pensions Savings Scheme."

Notes to editors

  1. The details of the FSA's original proposals to remove this rule are in its consultation paper CP 05/08**

  2. The FSA established the independent Financial Services Consumer Panel in December 1998 to advise its Board on the interests and concerns of consumers and to report on the FSA’s performance in meeting its objectives. The Consumer Panel has statutory status.

  3. The emphasis of the Panel’s work is on activities that are regulated by the FSA, although it may also look at the impact on consumers of activities outside but related to the FSA’s remit. More information about the Panel's work is available on this website.

  4. The Consumer Panel brings together a wide range of relevant experience. This includes financial services regulation, working with vulnerable consumers, consumer protection, consumer education, front-line money advice, legal expertise, competition policy, public policy analysis, market research and media.

  5. There are currently thirteen members of the Panel as listed below.

    6. John Howard (Chairman)
    Adam Phillips (Vice Chairman)
    Kay Blair
    Michael Chapman
    Stephen Crampton
    Caroline Gardner
    Jenny Hamilton

    Tony Hetherington
    Stephen Locke
    Nick Lord
    David Metz
    Lindsey Rogerson
    Carol Stewart

 

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