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More protection needed for bank customers looking to invest

By Nicholas Boyle

25 January2011

The FSA (Financial Services Authority) is calling for a greater level of protection for bank customers looking for investment advice, the Guardian reports.

Margaret Cole, enforcement director of the FSA, has said that any advice banking customers receive should be relevant to their "financial circumstances, their attitude to risk and what they hope to achieve by investing".

As the paper reports, plenty of regulations already exist - `but new scandals keep emerging`. The FSA has insisted that bank customers must get better advice on their investment.

That`s where the latest `regulatory initiative` - the Retail Distribution Review - comes in. The FSA is confident this will work.

When brought into effect at the start of 2013, the review will require advisers to agree a fee with their clients. This fee can, as the Guardian puts it, `be taken as a charge against payments into the savings product, in the same way as commission is now`. However, the amount and actual existence of the fee must be expressed more clearly.

Advisers will also be put through more rigorous training, and a clear distinction will be made between `restricted` advice (where only a limited range of products can be considered by the adviser) and full independent advice.

Tags: fsa, bank, advice, Retail Distribution Review, invest, investments

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