PIA Consumer Panel Report 1997

United Kingdom
This year, the PIA Consumer Panel's 80 page annual review is more important than usual for two reasons. First, 1997 was a year in which their work in attempting to speed the pension review finally began to have an effect. Second, when the FSA was launched it professed itself to be impressed with the work of the PIA Consumer Panel and proposed to adopt it as the model for its own Consumer Participation Standing Committee. It is expected that this Standing Committee will produce similarly detailed annual reports and attempt to influence the development of the new system of regulation of financial services.

Pension Review

The Consumer Panel remains very disappointed with the speed of the review which it sees as being a "damning indictment of the life and pensions industry". It considers that the organisation of the review was an indication of the poor management which allowed mis-selling in the first place. However, the Panel is pleased that the policy of PIA to "name and shame" firms has lead to greater urgency from senior managers who do not like seeing their organisations receive bad publicity.

The form of financial services regulation

The Panel can see clear benefits for consumers from a single, statutory, regulator but remains cautious as the detail of regulation has yet to be worked out. It would appear that the Consumer Panel will to some extent survive as the model for the new Consumer Standing Committee, and it is expected that a number of the members of the PIA Consumer Panel which has so impressed FSA will be asked to sit on that Standing Committee. In particular, the independence of the members of the panel will probably be reflected on the Standing Committee, and so similar concerns over the industry's performance are likely to be raised. For example, the PIA Consumer Panel remains worried that the financial services sector remains sales-driven. It feels that it will be difficult to assure consumers that they are being properly protected when commission remains the driving force in so many sales. The Panel does not expect to see the end of commission arrangements, but hopes that the new regulator will be able to encourage fee-based work. These views may well be mirrored by the FSA's Standing Committee.