FSA guidance on structured product advice wrongly makes the investments seem unsuitable for consumers with no risk appetite, according to AIFA.
The association says it will set up a working group to formulate its response to the FSA’s latest guidance, which comes in the wake of the collapse of Lehman Brothers.
Robert Sinclair, director of AIFA, says he is concerned the FSA’s new guidance on structured products will mean many consumers who might benefit from them will lose out.
“The FSA is making a blanket assumption that structured products are unsuitable for risk averse consumers, but we believe certain plans can be an important part of a balanced portfolio,” says Sinclair.
AIFA is seeking member feedback on the latest guidance and will hold a discussion meeting with interested parties on 4 December.
Following member feedback, AIFA will put its own proposals forward to the regulator.
Sinclair adds: “Some errors were made in the advice process that we must learn from. However, we have real concerns with some of the assumptions made in the recent guidance published by the regulator.”