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EDITIONS
Working Lunch Tuesday, 11 February, 2003, 15:55 GMT
Keep it simple
Brochures
All products should be clearly explained
The message to financial companies is clear - get rid of the gobbledygook.

And this time it's not coming from frustrated customers, but from the industry watchdog - the Financial Services Authority.

The FSA wants information to be streamlined so it's easier for people to shop around.

It says every pension or savings and investment product should have a concise and jargon-free document setting out the basic facts.

Mass of literature

"We know at the moment when consumers are buying financial products they are faced with a mass of literature," says the FSA's Mary Hollinshed.

Mary Hollinshed, FSA
Consumers will be able to find their way through the maze much better.

Mary Hollinshed
Financial Services Authority
"What we want to do is help them find a way through that maze to the right information. We want to get them to the key facts."

But all this comes at a cost - it's estimated providers will spend 110m to meet the FSA's demands.

"Are we sure this is the best way we can use this money or are there cheaper ways in which the right sort of information can be made available to customers?" asks Alan Leaman of the Association of British Insurers.

He says there is already a voluntary scheme called the Raising Standards Quality Mark.

Alan Leaman, ABI
You need to have a regime which is flexible enough to be able to adapt over time.

Alan Leaman
Assn of British Insurers
"This initiative is already under way, it's already affecting customers and improving the service to customers - let's build on it," he says.

The FSA, however, says it is looking for a step change with its Key Facts proposals.

It wants documents to:

  • enable consumers to compare products from different providers
  • help customers identify products which are suitable for them
  • include a Frequently Asked Questions section
  • highlight important factors people should consider before buying
  • present costs and charges in a simplified way.

    To help providers cope with the cost of the changes, the FSA is proposing to phase in the scheme.

    Isas, unit trusts and pensions have to comply within one year, savings and mortgage endowments within two years and all other products within three years.

  •  WATCH/LISTEN
     ON THIS STORY
    Junking the jargon
    Mary Hollinshed of the FSA in discussion with the ABI's Alan Leaman
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