Focus should be on where problems currently exist, says ABI's Craig
New FSA regulatory proposals could make it uneconomic for companies to develop financial products, the ABI has warned.
The proposals, outlined in a new FSA consultation paper on product development, sets out a range of future interventions that could be introduced in areas where the potential for customer harm is greatest. These could include banning products or prohibiting their sale to specific groups of customers.
ABI Director General Maggie Craig said: “There are some potentially useful ideas here and we can understand why consumers want simpler products, if they can be made to work
"However, there are also dangers to be avoided. Heavy regulation of both the sales process and product design could make it uneconomic for firms to offer products to consumers."
Craig added: "This paper does not explore how to ensure consumers have access to products that meet their personal financial needs. The focus should be on where problems exist and take into account that many markets already work well.”
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