The Association of British Insurers (ABI), British Bankers Association (BBA), and the Building Societies Association (BSA) have approved a ‘simple products’ framework.
The framework was independently validated by the Consumer Codes Approval Scheme (CCAS), part of the Trading Standards Institute (TSI). Consumers are encouraged to look for the TSI-approved code logo on simple products to ensure that the provider can be trusted.
Simple products are designed to have standardised features that are transparent and easy for consumers to understand.
The guidelines have been developed by the CCAS to help protect customers against product abuse. Businesses can voluntarily adhere to the guidelines and are only approved by the CCAS if they can prove they are operating within the code.
Independent consumer bodies that will sit on the Simple Products Steering Board to oversee the standard, framework, and accreditation of simple products include Citizens Advice, Financial Services Consumer Panel (FSCS), Macmillan, and the Money Advice Service (Mas).
Providers vying for approval to offer simple products under this framework will be able to apply for accreditation in the first quarter of 2015.
The trade bodies that have backed the framework cited peace of mind to consumers, ease of understanding, efficient comparison of products, transparency, fairness, and independent assurance that simple products are fit for their stated purpose as reasons behind their approval.
Confirmation of support for the framework follows the recommendations set out in the Sergeant Report in March 2013, which set the stage for simple products as a type of straightforward financial services products.
A Simple Financial Products Steering Group was first set up by the government in 2011 to initiate the approval of regulation around simple products. The government saw simple products as a way for consumers to take responsibility for their finances and restore confidence in the system.
Jeremy Edwards, independent financial adviser at Leicester-based Bankfield Financial Advisers, said that although the products are branded as ‘simple’ he would still recommend consumers to use a financial adviser.
“There are some simple products out there that may suit some consumers who are having to provide their own advice, but they should be aware of some quirks that could come up,” he said.