Financial services updater

25 February 2008

Retail Products

FSA Consumer Research - Depolarisation Disclosure

The FSA has published Consumer Research Paper 64 entitled Depolarisation Disclosure. The FSA commissioned GfK NOP to conduct a quantitative study to assess whether the Initial Disclosure Document (IDD) and the menu had been effective in helping consumers understand the status of their adviser, that there is a cost for advice, and that it is possible to negotiate and shop around. The research was conducted in two stages. The first stage was conducted in December 2005 among consumers who had taken out an investment product during the period prior to the introduction of the IDD and the menu. The second stage was conducted in February/March 2007 among consumers who had purchased an investment product in the previous year, after the introduction of the IDD and menu. The findings of the research was that the introduction of the IDD and menu have not improved consumer understanding of the cost of advice, commission, status of the adviser, or the option to negotiate, and have not led to more shopping around.

View FSA Consumer Research - Depolarisation Disclosure, (PDF 541KB), 19 February 2008

FSA Consumer Research Paper 65a

The FSA has published Consumer Research Paper 65a entitled Services and costs disclosure - Stage 1: Qualitative research with potential and recent purchasers of financial products.
The FSA commissioned BMRB Social Research to undertake a research programme to assess whether there is a justification, in terms of consumer understanding and decision-making behaviour, for imposing additional disclosure requirements on firms beyond what the Markets in Financial Instruments Directive (MiFID) requires. The research programme had three stages:

• Qualitative research with potential and recent purchasers of financial products.
• Qualitative research with potential and recent purchasers of financial products (large scale survey).
• Qualitative research – mock sales testing.

This report covers the first stage of research, comprising a qualitative study with consumers who were either in the market for a financial product, or who had recently purchased a financial product to identify the content, format and context for delivering information to consumers that is likely to be effective in promoting understanding of key messages.

The research found that consumers had a general interest in personal finance and obtained the information they needed from financially related television programmes and reading the financial sections of newspapers. Consumers did not generally consider themselves to be confident or experienced in gaining financial advice (with the exception of those who were financially sophisticated) and their experience was usually limited to a one-off purchase.

View FSA Consumer Research Paper 65a, (PDF 1.47MB), 19 February 2008

FSA Consumer Research Paper 65b

The FSA has published Consumer Research Paper 65b entitled Services and costs disclosure - Stage 2: Qualitative research with potential and recent purchasers of financial products. This report covers the second stage of the research which involved a large scale survey among recent purchasers of financial products to test how the different options performed in terms of increasing understanding. The report sets out the findings from the survey and how it was structured.

View FSA Consumer Research Paper 65b, (PDF 1.02MB), 19 February 2008

FSA Consumer Research Paper 65c

The FSA has published Consumer Research Paper 65c entitled Services and costs disclosure - Stage 3: Qualitative research – mock sales testing. This report covers the final stage of the research which involved a mock sales exercise which used real advisers to test how the Initial Disclosure Document (IDD) performed when compared with the MiFID baseline documents. The research found that consumers who had received the IDD generally understood the scope of advice available whereas consumers who had received the MiFID baseline documents only recalled the types of products and services offered. Part ownership was generally highlighted as a key message by consumers who had received the IDD but not the MiFID baseline documents. Information about the firm giving advice, including background to the firm, contact information, the role of advisers and entitlement to a free health check, was taken as a key message from the MiFID baseline documents. The key messages in the terms and conditions of business were felt to be easy to identify due to the headings used.

View FSA Consumer Research Paper 65c, (PDF 630KB), 19 February 2008