Britain’s Financial Services Authority is proposing that firms adopt a basic two-page point-of-sale disclosure document for retail financial products.

The FSA released a paper today proposing the adoption of “Quick Guide”, which would set out, “the most important factors consumers need to consider before buying a particular investment product”.

Firms would be required to give customers the two-page guide as part of point-of-sale information to help them make informed decisions about investing in products such as life policies, personal pension schemes and investment trusts.

Regulators and financial industry groups around the world are focusing on improving point-of-sale disclosure. Yesterday, a high-level Wall Street policy group released a paper on financial system stability that cited suitability and retail disclosure on complex products as a key reputational issue for the industry.

The main proposals in the FSA’s consultation are that firms must: produce the Quick Guide as a stand alone document; put it at the top of the marketing pack; follow a format containing numbered questions and bulleted answers; ensure the guide is no longer than two sides of printed paper; and, include a “regulatory message”.

The Quick Guide is one of the main elements within a proposed new wider disclosure package for investment products. Work on the other parts of the package is underway, and the FSA aims to publish a further consultation on this in March 2006 including a new approach to projection rates, and proposals on the disclosure of charges.

The final outline of the new guide will reflect the results of this consultation and consumer testing of the complete disclosure package to be undertaken later this year.

“Consumer testing of the Quick Guide, demonstrates that it will stand out from other marketing material and should enable firms to clearly set out the key benefits and risks of each type of investment in an easy-to-read format,” said Dan Waters, Director of Retail Policy at the FSA, in a release. “It will enable people to evaluate much better whether a particular product would be right for them.”