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OFT calls for more openness

Saturday 20 March 1993 19:02 EST
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SIR Bryan Carsberg, the Director-General of Fair Trading has called for more openness in the life insurance industry.

In two reports published last week he said that investors needed to be better informed, to foster competition.

'Without early automatic disclosure of commissions, in actual cash amounts, an investor will not know the price of advice, and cannot compare it with the cost of advice from other independent financial advisers, including those remunerated by fees,' said one report.

Sir Bryan said that some professionals who only give investment advice as a part of their work - such as solicitors and accountants - are obliged by their professional bodies to tell clients the amount of money they receive for arranging investment, while other advisers are not. This distorts competition between the two groups.

At present investors are only given information on commission late in the selling process and 'in a less than easily understandable form'. This, Sir Bryan said, distorts competition.

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