In July 2015, the FCA published a discussion paper exploring
smarter approaches to consumer communications. The regulator
acknowledges that many firms are trying to comply with expectations
around transparency and information, but sets out several areas
where improvement is necessary.
The FCA undertook several strands of
research to support discussion paper, including a literature
review; roundtable discussions with several key stakeholders;
reviews of practices in other countries; and reviews of practices
in other sectors, and other research initiatives. The discussion
paper then examined six specific areas where there is scope for
improving consumer communications:
- Terms and conditions:typify consumer concerns about information
complexity and overload. The DP encourages the industry, working
with relevant stakeholders, to focus on bringing about improvements
in this area.
- Fees and charges:the research found that consumers are best
able to assess the quality of a product or service and whether it
meets their needs when they are fully informed about its key
benefits and features.
- FOS/FSCS:there is more the industry can do to help consumers to
identify who is the most appropriate person to speak to when they
have a comment or query about a product or service that is not
operating in line expectations.
- General insurance common terminology:the regulator has
identified a number of issues in the general insurance market that
can potentially be addressed through effective consumer
- Complexity at retirement:consumer inertia and lack of
engagement are particularly prevalent when it comes to retirement
planning and saving.
- Investment advice:even post-RDR, there is an opportunity to
improve the information consumers receive about the scope and cost
of investment advice services to enable them to choose a service
according to needs and budget.
- The Discussion Paper closes on 25 September, and a feedback
statement will be published later this year. The FCA use the
responses to this paper, where relevant, to inform ongoing
interactions with the EU and domestic regulators on disclosure
- The FCA will work with firms to test new ideas. The results of
this testing, if effective, could inform the regulatory approach,
lead to consultation on rulebook changes and could also influence
our negotiating strategy when European directives are
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