The Financial Promotions Action Group has announced how it intends to work with the Financial Services Authority towards a market-based solution in the regulation of product marketing.
FPAG held its inaugural meeting on October 6, attended by firms from a wide-cross section of financial services. The meeting was addressed by Chris Atkinson, manager strategy and communications in the financial promotions department at the FSA, who said the FSAs “doors are open” to representations from industry.
John Fryer, spokesman for FPAG, says: “We were most encouraged by what we heard from the FSA. It is clear that there are concerns in the industry about the FSAs Treating Customers Fairly policy, and how this in turn affects how firms promote their products.”
The FPAG says it will not be a talking shop but intends to put practical ideas to the FSA. This will be done by stress-testing literature, advertisements, promotional packs and so forth with consumers in the context of TCF.
Importantly, this will apply not just to existing material, but also involve new thinking about what promotions might include while still conforming to regulations.
Five specific areas have been identified for research.
Defining what the FSA means by “fair and misleading”
Examining ways of reducing the number of items that the FSA requires to be sent out in a sales pack
Testing what consumers actually understand in the documents they are sent, in the wider context of financial capability and understanding
How to strike the right balance in what is written in documents for consumer understanding against the commercial pressures of keeping costs down.
Defining what support intermediaries need from providers to ensure the right product goes to the right customer.
FPAG is now in the process of setting up the infrastructure of the group with a view to commissioning the first phase of its research by the end of this year.