Plans to introduce 'caveat emptor' or 'buyer beware' into Financial Services Authority regulation have been held up by disagreements between consumer and industry bodies. In its 2004/2005 report, the financial services practitioner panel said that they were in negotiations with the financial services consumer panel and the Financial Services Authority to outline what this principle might mean in practice and how it would affect the regulations for firms.
After a working definition was put forward by the practitioner panel and rejected by the consumer panel last year, negotiations have tailed off. The Financial Services Authority have announced that so far, there are no plans in its 2006 business plan to introduce 'caveat emptor' in its rules.
Our view
The concept of 'buyer beware' is in virtually every other industry except financial services. Why is it that you can buy a car and if you have not done your research then tough yet if you buy a pension, the adviser is held liable for the rest of his life!
For too many times, the Ombudsman rules in the favour of the consumer when it is not always true that they were mis-sold.