NOTES TO EDITORS:

1. The calculation of 8 million people disenfranchised from financial advice is an approximate minimum based on ‘small’ policyholders, which we define as those with policy values of less than £5,000.
   
   • An FSA May 07 post-sales report concluded that there are around 8m ex-industrial branch with profit policies still in force. (Note: it is important to distinguish between policies and policyholders, as some customers may have more than one policy.) IB policies, sold door-to-door in the past, tend to have a very low value and few of these customers would have multiple policies. A cautious assumption is 7m ex-IB policyholders.
   
   • The research concludes around 2.6m people used an 'appropriate' personal pension (APP) to contract out of Serps/S2P for a few years and then contracted back in, with a resulting with profit policy of around £5,000.In addition there will be low-value lapsed personal pensions – possibly 1.8m but some of these may be APPs
   
   • To avoid double-counting of policyholders, the total of 7m + 2.6m ex-industrial branch and APP customers has been reduced to 8 million.
   
2. A policy value of £5,000 or less is considered ‘small’, particularly if there are no other assets on which the adviser can advise and be remunerated. If an MVR is applied this would reduce the fund value and the commission further. Typical initial commission for a new unit linked policy is about 3%, and therefore worth £150 for a £5,000 transaction. Many policyholders have funds of £1,000 or less so commission for a sale would be about £30. Importantly, the commission is only paid if the (complex) with profits review process reveals that the customer would be better off transferring – if the customer stays put, the adviser receives no remuneration for the work.
   
3. 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.
   
4. 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.
   
5. 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.
   
6. There are currently twelve members of the Panel as listed below.

John Howard (Chairman)
Adam Phillips (Vice Chairman)
Kay Blair
Michael Chapman
Stephen Crampton
Caroline Gardner
Jenny Hamilton
Tony Hetherington
Nick Lord
David Metz
Lindsey Rogerson
Carol Stewart