Norwich Union's response to the FSA's discussion paper on lighter touch regulation for 'simple' products

Article date: 3 January 2003

Norwich Union is pleased to see the Financial Services Authority(FSA) today begin consultation on new, lighter touch regulation ofthe sales process for the new suite of Sandler-advocated simpleproducts.

We are also pleased that HM Treasury will be consulting in early2003 on the minimum specifications for these new, simplifiedinvestment products.

Of the three broad options set out today in FSA Discussion Paper19, Norwich Union’s initial view is that the most promisingproposal at this stage would seem to be ‘Guided self-help’.

Any changes should be about allowing providers to reach newpotential customers for long-term savings products, whilst offeringa reasonable level of consumer protection.

Norwich Union looks forward to providing a fuller response tothe FSA on how today’s proposals might work in practice,including how simplified products will interact with products inthe full advice market.

Commenting, Peter Hales, sales & marketing director forNorwich Union, said:

“We welcome today’s FSA consultation document, whichprovides an opportunity to widen access to a range of simplifiedlong-term savings products amongst consumers that are currently notbeing reached. But at the same time, it is important that theopportunity for full advice through IFAs remains widelyavailable.

“However, the economics of distributing these productsremains difficult. A more flexible pricing framework would bewelcomed, and would result in the market operating efficiently andeffectively to stimulate demand amongst lower income customers.Without increased flexibility around the 1% price cap, expansion ofthe UK long-term savings market is unlikely to be achieved.

“We do not believe that removing the Conduct of Businessrules altogether would help either providers to distribute productsto the marketplace, or consumers to buy them. We would prefer toexpand the market within some form of regulatoryframework.”

Notes to editors

  • Norwich Union is the UK’s largest insurer. It is theUK’s largest provider of life, pensions and investmentproducts and one of the leading IFA providers. IFAs provide around75% of the company’s long-term savings business.
  • Norwich Union has strategic alliances with building societiesand other leading UK brand names including Tesco Personal Financeand The Royal Bank of Scotland Group.
  • A selection of images are available from the Norwich UnionNewscast site at

For further information:
James Evans, Norwich Union Life 08703 66 68 78/07790 487105
Ian Beggs, Norwich Union Life, 08703 66 68 71/07790 487533
Louise Goffee, Norwich Union Life, 08703 66 68 70/07810 057362

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