SIB stand on costs disclosure welcomed

Friday 07 January 1994 19:02 EST
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PROPOSALS to force all financial advisers to tell clients how much they stand to earn from the policies they sell have been welcomed by the Consumers Association.

Salesmen will have to declare the amount before they can get a customer's signature on a policy proposal, the Securities and Investments Board, the industry's top watchdog, said this week. SIB's instructions will come into force next January.

Jean Eaglesham, head of money policy at the Consumers Association, said: 'We are generally very pleased. We think the new regime should be effective and significantly help consumers appreciate the costs and risks of the products, to counteract the sales pitch from salespeople.

'What SIB will have to do is ensure that the freedom given to product providers to devise their own commission wording is not abused. But we believe they are aware of the problem.'

Ms Eaglesham added that SIB should ensure the life insurance arms of the large banks did not try to minimise the commissions they paid staff by failing to include all the costs of selling a policy.

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