The decision to retain the RU64 rule by the UK Financial Services Authority, has created a mixed reaction among advisers, with some welcoming the change while others are disappointed with the ruling.
The independent Financial Services Consumer Panel established by the Financial Services Authority (FSA) expressed its delight over the decision to keep the RU64 rule, which requires financial advisers to inform clients about the existence of low-cost stakeholder pensions when advising on pensions in general.
The panel claimed that the move was good news for consumer protection as it would lower the risk of mis-selling. This was also supported by consumer watchdog Which?.
In contrast to this, the Association of British Insurers (ABI) stated that it believes that the decision is inconsistent with the drive towards a principles-based regulatory regime. Stephen Haddrill, the ABI’s director general, added: The ABI will be scrutinising future FSA decisions to test whether they uphold the regulator’s commitment to better regulatory principles, or undermine them.
The decision was delayed in May 2006 until details of how personal accounts would work surfaced, then, in October 2006, a consultation paper named ‘Reforming Conduct of Business Regulation’ further delayed the issue, according to IFAonline. As a result, the FSA now confirmed that a decision would be made in early 2007.