AIFA launch conference - Speech by Howard Davies

"Effective consultation with the industry, with firms and through trade associations, is essential for the FSA. The AIFA is therefore right to highlight the consultation function of a trade association in its mission statement. We look forward to close interaction with the new Association and its leaders. We welcome the prospect of receiving a more co-ordinated, and perhaps better researched set of responses from IFAs in future."

Looking to the future, Mr Davies explained that new products Individual Savings Accounts, Stakeholder pensions Government CATMarks and particularly the forthcoming league tables from the FSA, would create a new environment for IFAs. But the prospects for them were good, for four reasons:

"First, consumers will still need advice on which product type is suitable for them in their circumstances league tables will not diminish the importance of helping the customer to determine the product which will most closely match her requirements.

Second, customers will be more aware that products scoring well on one indicator dont necessarily perform well on another. They will want advice on the trade-offs. IFAs are the people best placed to answer those questions.

Third, greater transparency should also make consumers aware that a product from one provider is not necessarily as good value as the product from another. People may be more inclined to stop and think before they buy. If that is what they do, they are quite likely to go to an IFA to help them.

Finally, giving consumers authoritative and accessible information can help rebuild confidence in financial services which has taken a knock over the hard years of the pensions review."

He noted that the last five years had been good for IFAs, with rising numbers of advisers, growth in market share, higher persistency rates on regular premium policies and lower than average consumer complaints.

"Well-equipped IFAs, even some of the smallest, are showing they can do business to high standards and prosper. We want to see more firms emulating the standards the best are setting."

A copy of the full text is available on this website: http://www.fsa.gov.uk/speeches/1999/september/03091999.htm