The FSA’s final views on high risk products, UCISs and independence are not exactly surprising but they do represent common sense. Many IFAs have told me they didn’t like UCISs nor had they at any time in the past, so they certainly didn’t want to spend their time researching them, even if only to subsequently discount them to keep the regulator satisfied. One final point, on UCIS, the FSA almost sounds like it is contemplating a ban which may give a few Bulgarian holiday home fund purveyors some sleepless nights.
On high risk products more generally, it would have been surprising were the FSA to suggest that IFAs should be recommending them when the FSA itself had said they were not suitable for the retail market. So for example with life settlements funds, the fund equivalent of persona non grata, it is a reasonably simple task. But there could be a bit of a bind for the FSA and FCA eventually in this area if only because if the regulator doesn’t deem a product unsuitable does that imply approval? True this applies whatever is happening to independence in the RDR, but the regulator will still want to be careful. I get a sense some structured products remain on a little bit of fault line, given that some IFAs will simply not countenance using them, but I’m going to speak to a few people first before opining further. Overall, this is now much better for advisers looking for clarity but there will still be some interesting debates in future.