Will the regulator accept that the regulation is partly to blame?

When the regulator reviews unit linked funds and annuities, it may be confronted with an uncomfortable truth. It may find itself asking why in the case of the former, the money hasn’t shifted somewhere better, and, in the case of the latter, why some annuities offer poor value but investors don’t shop around. We think the answer will be because many of the policies pursued by the regulator have actually led to this state of affairs. Both could conceivably be blamed on a lack of advice and advisers and partly on the fact that it simply isn’t cost effective any more to advise middle Britain.

That doesn’t mean that the Money Debate would throw out all this regulation. We admit that in the case of the extensive history of unit-linked recommendations, it’s a bit more complicated than a case of ‘not enough IFAs’.  That said, people with good advisers don’t sit in rubbish funds, nor do they take the first annuity offered. But will the FSA/FCA accept that some of the market malfunction comes as a result of its policies?


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