Outlook: FSA rules

HOWARD DAVIES and the Financial Services Authority are doing a good job but their performance is not without blemish. What concerns the savings industry currently is the yawning contradiction between the Government's oft-repeated desire to ensure that the poor are not excluded from access to financial services and the bureacratic box-ticking approach to consumer protection to which parts of the FSA sometimes are prone.

The pickle into which United Assurance has got itself into is no doubt at least partly of its own making. But Alan Frost, the chief executive, has a point when he says that in the real world, where companies have to make money or go out of business, the cost of compliance with an ever more onerous FSA selling regime is forcing it to abandon the traditional door-to-door collections which for many in the sink estates is the only genuine opportunity to save. This is not an isolated phenomenon. Ian Harley, the chief executive at Abbey National, recently pointed out that its desire to make buying financial services products simpler and more straightforward for customers was frequently being frustrated by waves upon waves of rules about what customers have to be told before they can sign on the dotted line. I

Industry insiders have likened the regime to a customer walking into a shoe shop and asking for carpet slippers only to be told to sit down for two hours and answer a questionnaire so that their current footwear needs can be properly assessed. Decision trees which are the latest FSA fad may be good for hanging management consultants on but they aren't going to make granny stop stuffing her fivers under a mattress.