# Should IFSRA regulate the provider or the product?



## Brendan Burgess (18 Mar 2004)

_This is the second big question in IFSRA's consultation document. To encourage people to read and respond to it, I have edited down_


Because of this, we ask you to give your views on whether the codes should:
continue to be structured according to service provider (for
example, by credit institution, insurance company or
moneylender);
change their focus to services, so that all service providers –
banks, insurance companies, intermediaries, solicitors or
accountants – must obey common rules when providing a certain service;
focus on types of product so that firms must comply with a
common set of rules when advising on or selling a particular
product;

...

Our preference is for product focussed unified codes that take account of the particular legal frameworks, both European and domestic, under which different providers operate. However, it is important to point out
that we do not approve products but instead concentrate on ensuring that all products are explained in a clear and open manner prior to the consumer buying them.


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## Brendan Burgess (20 Mar 2004)

*Re: Should the provider, the service or the product be regul*

Some initial thoughts:




> Consumers must be able to expect that the same standards apply to the sale of a financial service product regardless of who the seller is.



I don't agree. I would expect a fee based, advisory type service from an accountant, solicitor or Authorised Advisor or mortgage broker. 

If I go directly to the product provider or their agent, I would expect them to sell me the best product they have as distinct from the best product for me. 

So I think that the rules governing advisors should be different from the rules governing providers. This would apply to all areas, investments and mortgages and insurance. 

Product providers should not be allowed to pretend that they are giving independent advice. Mortgage brokers should not be allowed use the word "independent" if they get commission based payments.  

But when I take out the mortgage or the life assurance, I should get the exact same information, irrespective of the channel through which I bought it. 

Brendan


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## Merlin (2 Apr 2004)

*Regulating Trackers*

This is probably off topic, but we can see in other threads that the regulation of Trackers is woefully inadequate.

Should the product be regulated?  Probably no and probably against EU law.

But the the problem with Trackers is not with the product _per se_ but with how it is marketed.

The marketing of financial products should be subject to approval.  Providers should be free, and indeed by EU law are free, to produce the most esoteric forms of Tracker products.  

Whether such permissiveness is desirable is moot but irrelevant since EU law states that it is allowed.  

The only and best way to regulate this witchcraft is through regulating how they are marketed.  All marketing material should be subject to approval - so far as I am aware this is not contraray to EU law.


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