Commenting, Paul Smee, Director General of AIFA, said: “AIFA originally proposed the menu as an alternative to the FSA’s plans to introduce a defined payment system for IFA clients. Our version of the menu focussed on simplicity and flexibility, which we believe are the key factors that would make it a success. We remain convinced that the menu is the best way of providing transparency by setting the cost of advice squarely within its context. AIFA will encourage its members to make full use of the section where firms describe their services.
“The FSA’s proposed version of the menu is, however, overly complex and there is a danger that it will not be read by consumers. This in turn will not meet the regulator’s objective of encouraging consumers to shop around. The menu has become too cluttered and, in the process, could lose its key message. There is a disproportionate focus on cost, whilst if it is to work effectively, the menu should also demonstrate value.
“The regulator should be aware of making the menu try to achieve too many objectives. The best can be the enemy of the good.”
AIFA’s full response to the FSA’s CP04/3, can be accessed by clicking on the link below:
http://www.aifa.net/publicnews/pressreleases/attachments/cp04_june.pdf
