FSA research sheds new light on consumer needs for advice
04/10/2001
New consumer research reported today shows that consumers using tied agents, as opposed to independent financial advisers, do so for reasons of trust and convenience, which may mean that they dont shop around for the best deal. Additionally, an increasing number of consumers are prepared to pay fees for advice and are suspicious that commission leads to bias when recommending products.
The research was revealed, by the Financial Services Authority (FSA), at an Open Meeting to discuss the polarisation regime and the benefits that may be gained for consumers by liberalising polarisation in the tied sector.
At the meeting, the FSA presented the findings, to date, of the research it has commissioned. The research throws valuable light on what motivates consumer behaviour, what economic influences are at work in the market and how the two fit together.
FSA presentations at the meeting gave a flavour of options for change that the FSA thinks merit further exploration, along with other related issues.
Howard Davies, chairman of the FSA, told attendees at the polarisation meeting:
The FSAs aim is to secure consumer protection, but in a way that is less restrictive of competition. We think that can be done whilst strengthening the provision of advice. Over the last three years the number of independent advisers registered with the FSA is up by over 40% as direct sales forces have reduced.IFAs now face a series of challenges new products, charging caps and, potentially, polarisation reforms but the sector has already shown that it is able to adapt to change.
Notes for editors
- The polarisation open meeting was held today at the Conference Forum, Aldgate, with a number of speakers representing the industry, consumers and the regulator.
- The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; and fighting financial crime.
- The FSA aims to maintain efficient, orderly and clean financial markets and help retail consumers achieve a fair deal.