FSA to scrap Menu & IDD documents

dunstonh

We have mentioned this before in here and investments section and how misleading they can be at times.

It has just been announced that they are to be scrapped as they breach European rules. The FSA intend to implement Mifad (the EU rules) on November 1st. This also shows a shift of power from the FSA to the EU and that will benefit financial services companies in general as the FSA rules are in conflict with human rights rules in other areas and this may see changes there as well.

I say good riddance. Too many documents were being issued upfront with data on them which was often inaccurate or vague and was of no benefit to adviser or consumer.

MortgageMamma

Hi dunstonh

what is Mifad?

dunstonh

Markets in Financial Instruments Directive
http://www.fsa.gov.uk/Pages/About/What/International/EU/fsap/mifid/index.shtml

MortgageMamma

Oh right thanks! I've not had time to read that yet but I've book marked it for after holby city.

dunstonh

The concerns for advisers running their own firms were mainly an increased level of cover under PI making it more expensive. The FSA have more issues than most of us here really.

mortgage advisers didnt have to worry about the Menu so you wont miss that. It was a piece of anti-competitive rubbish that made out that the firm with the lowest commission was the cheapest. Which of course is not correct.

Mr_helpful

!!!!!!!!! Just as I had got used to using the Initial Deception Document as a way of totally confusing the client over how brokers are paid and that some nasty ones would charge a humongous fee and I wouldnt. Plus completely baffled them with the advantages of being independent over whole of market and you say the bloody EU is getting rid of it? I was just beginning to love the FSA now its back to hate again oh well

dunstonh

ROFL - it certainly was a confusing document.

I dont know how many times I have said that these are not what you will pay but I have to show them in the document to give you an indication of what you will pay...even though you wont pay that.

EdInvestor

Since the FSA refuses to force firms to reveal the full cost of investment, this won't make any difference.Fees and charges will still be opaque and the consumer will still pay a lot more than he is told.

dunstonh

Since the FSA refuses to force firms to reveal the full cost of investment, this won't make any difference.Fees and charges will still be opaque and the consumer will still pay a lot more than he is told.

The retail charges are fully disclosed. No doubt you are referring to the very few items which are internal charges which can increase the charge above the published amc. Seeing as they are not explicit charges to the consumer, there seems to reason to.

MortgageMamma

Dunstonh - its unclear to me as to whether this includes mortgages or is it just an investment class rule?

jamesd

The menu was useful in providing a clear breach of regulations for an IFA who refused to provide one or reply to questions about for-fee service.

Hopefully they will be replaced by something with at least as much disclosure, including profit difference disclosure even where the customer cost is the same.