Time to break free of complicated financial products?

The RU64 rule is one of those procedures that protects you without you realising. It’s going on in the background, but you probably haven’t noticed it.

So what’s it all about? It’s a pensions rule that was introduced 12 years ago. It means that advisers can only recommend a pension if it’s benchmarked against a simple transparent version – in this case, the Stakeholder pension (a low-cost pension with an easy to understand charging structure).

The rule helped to reduce mis-selling, made it easier to compare products and brought down charges, so of course, we supported it. But companies have fought a long campaign to try to have it scrapped so they would be able to sell people more complex and expensive pensions.

In the past, the Financial Services Authority has been on the brink of giving in and scrapping the rule. But, after strong opposition from us, the rule is staying, and the concept may even be extended to other complicated products.

Not only will this mean that companies will have to give you the details of the simple products which would meet your needs (especially if these could be more appropriate than a more complex alternative), it should make it much easier to compare products and increase transparency.

Which financial products bamboozle you the most? Are there any areas where you would welcome more simplicity in the range of products offered to you?