Callum McCarthy, the chairman of the Financial Services Authority, Britain's financial watchdog, has warned that consumer education and clearer documents are needed to make financial competition work. Speaking to the Reuters news agency, he said:
"In Britain, 23 per cent of adults, if presented with the Yellow Pages directory and asked to give from it the name of a plumber, cannot do so; over 20 per cent cannot do simple percentages ie are unlikely to understand either of my last two statements. Yet as a country we are moving a number of the most important financial decisions for health provision, for education, for pensions from institutions to the individual, even when many individuals are poorly equipped to take those decisions. Nor is the position a good one in terms of relevant and comprehensible information being given to customers by providers of financial services: too often the product, already complex, is made still more complex by a specialised and difficult to understand
vocabulary I suspect that not many here this evening will admit to understanding what a reversionary bonus is.
"We are requiring firms to provide basic information in standard form (to make comparison of competing products easier), and requiring fuller and clearer disclosure (of life products, for example). So we expect progress towards clearer, relevant information."
