A new 'keyfacts' initiative introduced by the FSA gives buyers the important and practical information up front, making it much easier for them to make the right decision.
Following four years of extensive research and consultation, the FSA became responsible for the regulation of the sale of mortgages in the UK from October 31 last year, and the sale of general insurance on January 14 this year. This is a major step for the FSA and involves the direct supervision of thousands of firms and, more importantly, offers protection for the millions of UK consumers who take out a mortgage or buy general insurance each year.
One of the major and immediate benefits for consumers ushered in by this new regime is the provision of clearer information about mortgage and general insurance products and services through the new 'keyfacts' documents. These documents will make it easier for consumers to shop around and compare products to help them find the best one for their needs.
When a customer contacts a firm, financial adviser or broker, they will be given a document that sets out the key facts about the service being offered – these documents will be clearly marked with the 'keyfacts' logo so they will be instantly recognisable. This is one of the most important pieces of information that buyers will receive as it will set out the service that is provided, including facts on:
-Which products the firm offers;
- Which services the firm will provide;
- What the service will cost; and
- Whether the firm will refund a fee in any circumstances.
As well as information on the service provided, the range of products and the fees charged, the customer will also receive a summary of the most important features of the product (sometimes called a 'keyfacts' illustration) in a standard format so it can be compared with other similar products. By comparing 'keyfacts' illustrations for different products, customers will be able to better shop around and work out which one is best for them.
Anna Bradley, the FSA's Director of Retail Themes, said:
"The new 'keyfacts' documents give consumers better access to the crucial information they require to make informed choices on the best products and service to suit their needs. Basically, 'keyfacts' documents will help customers to understand what they are buying, what they are paying for it and what they can expect to get for their money. Consumers will be able to compare products much more simply making it easier to shop around."
