Impact of Financial Services Act on Investment Products Available to Purchase

The implementation of the Financial Services Act 1986 has forced retailers of investment products to become tied to a single insurance company or to act as an independent by selecting the best product for the customer from the entire market. As a result of this many retailers of investment products have become tied to single insurance companies leading to a significant change in the relationship between the manufacturers and retailers of financial products. In addition there has been a sharp reduction in the levels of business transacted through the independent channel and the availability of independent financial advice. This has affected manufacturers in different ways depending upon their existing sources and mix of business. In the longer term this is likely to lead to a reduction in the number of life offices and the more rapid creation of financial conglomerates based upon the top ten banks and building societies.