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19 Feb, 2008

Published: 11:11 Tuesday 19 February 2008
By: Tony Bonsignore, New Model Adviser News Reporter

The Financial Services Authority today proposed a new 'safe harbour' single disclosure document for advisers that would replace the menu and the initial disclosure document (IDD).

The new document, detailed in a consultation paper issued today, is likely to be introduced by August and will only be offered as guidance, as the menu and IDD have been since November 2007. However, those who do use it will be reassured by the FSA that it represents best practice.

As well as merging all existing information into a single document, the new form also drops the menu's controversial requirement to include details of average industry costs.

The announcement that the menu and IDD were to be axed as compulsory requirements was made in May last year - less than two years after being introduced. The FSA said the move followed consumer research that showed the documents were not benefiting consumers as much as been hoped.

Dan Waters, FSA director of retail policy and themes, said the regulator was emphasising principles-based rules and outcomes rather than processes and procedures.

'This new document aims to provide key information in a more streamlined way to help consumers better understand the services offered by advisers,' Waters said. 'But, as guidance, it is only one way for firms to comply with COBS disclosure requirements. Firms will be free to develop their own disclosure documents to provide effective and clear disclosure to their clients.'

The consultation period on the new document lasts until 19 May.

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