Shock report- insurers actually trying to save you money
No, it isn't April 1, both the Association of British Insurers (ABI) and the Chartered Insurance Institute (CII) have both sided with consumers instead of the Financial Services Authority (FSA) in its latest attempt to mollycoddle us into paying more protect consumers.
In simple terms, the FSA have spent the first part of this year consulting on whether it should force people to take advice or certain products before purchase. Currently, savvy and well-informed consumers such as the BitterWallet faithful are perfectly at liberty to do their own research into financial products and then approach the relevant insurance company with cash in hand. Provided you are happy to sign to say you had not received advice (to cover said insurance companies' bottoms) then jobsagood'un.
However, on some 'complex' products, the FSA would like to force customers to pay for a full advice service- meaning insurance companies would have to go through all the details, risks, rewards and alternatives with you, and charge you for the privilege, regardless of whether you want or need such advice. Only an acronymic quango could come up with such a brilliant idea.
The consultation closed at the end of April, and in its response, published last week, the ABI said: “We are generally sceptical of proposals which effectively force consumers to spend money on advice that they do not require or wish to take. It may also exclude certain consumer groups from the market by making it more expensive and difficult for them to access products.”
The ABI adds that the FSA should not make any judgements on product intervention until the European debate on the definitions of complex and non-complex products has been resolved.
The conclusion to the European debate, which is also proposing a ban on execution-only style transactions is expected this spring, so for now, we can only wait and see what the FSA decide to do. If they can't screw you one way...