Towry Law urges caution over financial services standards

TOWRY LAW URGES CAUTION OVER FINANCIAL SERVICES STANDARDS 81% of Adults Do Not Recognise the CAT standard CAT marks and new industry innovations for standards in financial services need careful handling according to Simon Farrant from Towry Law. Concerned that the public was misinterpreting CAT standards, Towry Law commissioned BMRB to test the public's understanding. The results were as follows: 1,000 adults were asked whether they recognised the term "a CAT standard" in relation to financial products and services. 81% of respondents said that they did not know the term. On the plus side, of the 19% who did recognise the term, 71% correctly identified that a CAT standard was a Government assurance that the product has decent terms, is easily accessible and has fair charges. Of more concern is that 22% thought that a CAT standard was a Government recommendation for product performance. In addition 26% believed that it was a Government assurance that the product was a safe investment. 30% believed it also meant that the product was suitable for any type of investor and 23% thought that it was a Government assurance that the product offered the most competitive rates. When asked if a product carries a CAT standard, would they be more likely to buy the product or would they go and get financial advice, 60% responded that they would be looking for financial advice. Only 29% would be tempted to buy the product because of the CAT mark. Simon Farrant of Towry Law commented: "There is a lot for everyone to think about here. The Government may have concerns that the CAT mark is seen as their endorsement of a product. However of more concern is the overall lack of understanding of the mark. "Providers may shy away from CAT-marking products if, at the end of the day, their customers do not understand the term. "Finally there is the question of advice. A 1% world makes advice on some products incredibly difficult. Yet the clear message that we get from the research is that the majority of people want advice. Advice must not be priced out of the market, regardless of whether that advice comes from an independent financial adviser, a direct salesman or tied agent. If the public are as heavily reliant on advice as this research indicates, then it establishes the true value of polarisation." -ENDS- For further information, please contact: Simon Farrant Ian Howe Senior Technical City of London Manager Consultant Towry Law Financial Towry Law Financial Services Ltd Services Ltd Tel: 07769 880 637 Tel: 07769 880 373 Leo Thomas / Sophie Gerard Lansons Communications Tel: 020 7490 8828 leot@lansons.com / sophieg@lansons.com Notes to Editors: · Research was prepared by ACCESS, the Omnibus Division of BMRB International between 10th - 12th August 2001. Since 1958 Towry Law has established a reputation as one of the leading independent financial planning consultants in the UK. As independent financial advisers and insurance brokers, Towry Law provides complete financial solutions based on an innovative approach and the personal nature of its service. Towry Law Financial Services Limited is regulated by the Personal Investment Authority. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/09/04/20010904BIT00920/bit0003.doc http://www.waymaker.net/bitonline/2001/09/04/20010904BIT00920/bit0003.pdf