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

"We continue to believe that it would be a mistake to remove the RU64 Rule, which requires financial advisers to tell clients about the existence of low cost stakeholder pensions when advising on pensions generally. The main points we have made to the FSA Board are:

• removal of RU64 could mean a new round of mis-selling, causing consumers not only to buy a pension that is more expensive than they need, but also possibly disqualifying them from being eligible for the National Pension Savings Scheme when that comes into being.
  
• The FSA has said that it could use the principle of treating customers fairly and the suitability rule instead. But the suitability rule only requires advisers to recommend the most suitable product from their range, and this will not be sufficient to protect consumers. Multi-tied advisers who have a stakeholder pension in their range at present will simply have to drop that product from their range to comply with the suitability requirements. This could also affect the balance of the market, as independent financial advisers would not be able to take this action.

"At least the FSA has now given more time to consider how the development of NPSS may affect the selling of pensions in the next few years and the impact of the removal of this rule in the light of that."

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