The FSA is to establish an advisory group to devise ways of improving consumer's understanding of and confidence in financial services and products.
Addressing a Corporation of London dinner, FSA chief executive John Tiner said "Firms and consumers have a mutual interest in the market working better and this means having more capable and confident consumers who can identify their needs and know what to do about them."
Tiner said the FSA had already developed a "product risk framework", a tool designed to assess the risks to consumers of new insurance products.
The framework will assess each product on three criteria: firstly, its inherent characteristics, secondly, the controls firms have in place to govern marketing of the product, and thirdly, the target audience of the new product.
This was not another form of regulation, said Tiner, but "a tool to provide an early warning of products that may be about to be launched or are circulating in the market that present particular dangers to consumers".
Tiner said the advisory group will have the aim of establishing plans to achieve better consumer understanding by 31 March next year.
