L&G: Advice rules must ease if product regs tighten

The rules on giving advice would need to be eased up if the FSA pushes for a rumoured tightening of product regulation, says Legal & General's (L&G) executive director of savings.

FSA CEO Hector Sants has called repeatedly this year for the watchdog and the new Consumer Protection and Markets Agency (CPMA) to have a greater say in the design, development and marketing of products.

In what would be a major increase in powers, he also wants the CPMA to be able to ban those it deems "unsuitable".

But Mark Gregory says while consumer protection is important, L&G would lobby against a double tightening across both advice and product manufacturing.

"If there is greater product regulation then some of the advice regulation would need to ease up."

Speaking at a Treasury Select Committee hearing on financial regulation last month, Sants said the CPMA must have more power than the FSA, including to stop certain financial products entering the market place.

"If the CPMA only takes over the FSA's power this is not sufficient. It needs the power to make executive direct interventions to ban products," he told MPs.

In terms of L&G's current product development, Gregory says the focus is on creating RDR-compliant products for early transitioning advisers who plan to remain in the industry post-2012.