As well as limiting liabilities for certain products, DWF partner Harriet Quiney says safe harbours could also apply to sales processes, such as the use of decision trees.
She says this would have to be supported by maximum investment limits and some form of compensation if the decision tree process meant an unsuitable product was bought.
Quiney says: “Creating a safe harbour for the sales process could come dangerously close to inviting the FCA to risk-rate products, which it has traditionally refused to do.
“There are still risks – there could be a flaw in the decision tree that is not picked up for a number of years and by the time it is spotted, a large number of people have invested. But this is always a problem with a safe harbour. It may look like a prudent response when designed, but you can never tell exactly how it will apply until problems arise.
“I am sure that if the FCA has any major reservations about a safe harbour, it is that they might end up harbouring something undesirable by mistake.”