Impose test on financial products, MPs urged
1st April 2010
Financial products should be subject to rigorous testing before going on sale, an influential think tank has said.
The Commission of Inquiry into the Future of Civil Society, funded by the Carnegie UK Trust, also claimed that products including savings, ISAs and pensions should come with labelling detailing how money would be invested and who would benefit, arguing that the complexity of these offers made it much harder for the public to influence the investment policies of large corporations.
The group said such items should be subject to a "comprehensibility threshold" which would assess whether or not they were easily understood. Deals passing the test would be permitted to operate on the market, while those which did not would be barred.
Commission chairman Geoff Mulgan, said: "We are very used to seeing labels on food products about their content and how they have been produced. The same principle now needs to be applied to things like mortgages, bonds, ISAs and pensions."
Copyright © Press Association 2010.
