David Prosser: Regulate salesmen, not what they sell

Outlook The Financial Services Authority said yesterday it was not moving to a system where it pre-approves financial products because it does not have the resources to do so. A better reason for avoiding such a system is that it's a bad idea.

On occasion, financial products do come along where the problems are so obvious that there is a case for regulatory intervention. All of the big scandals of the past two decades, however, have involved financial products that have simply been sold to the wrong people.

From the mis-selling of personal pensions to people with superior occupational plans to the conning of self-employed people into buying payment-protection insurance that kicks in when they lose their jobs, it has been salesmen rather than product designers who have been at fault. The quality of advice is the thing to focus upon.