What John Tiner and Gordon Brown have in store for this year

While the investment outlook for the next 12 months is more uncertain than for many years, the rules of the financial game are set to change in some major ways. And the biggest theme of 2005 is likely to be an ugly piece of jargon called depolarisation.

This is the label for a set of rule changes governing the way financial products are sold. Under the previous regime, sellers were polarised between being totally independent or totally tied to the products of one provider. Depolarisation has once more blurred that distinction, letting banks and other retailers sell a range of providers' products under what is known as a multi-tied arrangement.

The idea behind the change is to recognise that most people go to banks or supermarkets for financial products, so it is in the public's interest that those outlets should have a wider range of investments and policies to offer. That, hopes John Tiner, the chief executive of the Financial Services Authority (FSA), will encourage more of us to save, invest and become involved in the financial system.

Consumer groups such as Which? are concerned that individuals will not realise they are being sold part of a limited range of products that are not necessarily in their best interests. Even IFA Promotion, the body which the financial services industry pays to bat for financial advisers, has said the changes risk confusing consumers.

The main consumer protection will lie in two new documents. One explains the type of advice on offer and the range of products that can be advised on. The other details the cost of getting that advice and whether it will have to be paid through commission or fees. The commission must be compared with the market average on that type of plan. We shall see in the next few months whether all that information is going to shield a customer from the wiles of a determined but unscrupulous seller.

Mark Dampier, of the adviser Hargreaves Lansdown, said: "I expect it will be what it was when it was in force before, a free-for-all mess. I definitely don't think it will give more choice. It will drive the high-networth client to the independent financial advisers (IFAs), and the banks will take out the risk. But the banks have never been good at selling their own products, let alone anyone else's. They are about the worst place you can go."

All financial firms have to be operating under the new regime by 1 June. Between now and then will be a transition period, in which some firms will conform and some will not. That alone could turn out to be a tricky phase. Many IFAs are switching over from charging commissions to charging fees, which could slash their income in the short term as their clients adjust to that. Some are expected to tough it out: others may fold or sell themselves to rich parents, as they have been doing for the past couple of years.

One of the first products banks will have to sell will be Gordon Brown's new Child Trust Fund (CTF), which will take effect on 6 April. Vouchers are being issued this month: £250 for each child born on or after 1 September 2002, and £500 for children whose families qualify for the full Child Tax Credit - that means having a household income of less than £13,480.

Vouchers and explanatory packs go to the parents or guardians of every child for whom child benefit is claimed. They should open an account with an approved provider as soon as possible.

The trouble is, where do they sign? The biggest fund manager in the UK, the US-owned Fidelity, only last month said it was not going to offer a CTF account.

One of the few big players to step forward is F&C.

Among the smaller intermediaries, the Share Centre is offering all Independent readers the chance to receive free advice on share dealing through a Child Trust Fund. Gavin Oldham, chief executive of the Share Centre, said: "I think CTFs can do a lot to spread the word about shares. Stock market-based investment is the key to good performance in CTFs, and we are offering guidance to help parents select the best investments for their children's future. All you need to do is telephone 0800 800 008 asking for Child Trust Fund free advice."

The long-awaited Stakeholder initiative will also take its bow in April, giving access to a suite of simple, low-cost and hopefully risk-controlled savings and investment products. Many providers are boycotting this scheme because it will pay them only 1.5 per cent commission, which they claim is not enough to be profitable. But there will still be a decent range of choice.

Child Tax Credit will rise by £65. Personal allowances for the over-65s will go up to £7,090 a year from April, and to £7,220 for the over-75s. Other personal allowances and the Working Tax Credit will rise in line with inflation.

The FSA will have its hands full this year coping with the insurance industry. This weekend it is imposing tougher demands on insurers to keep their capital reserves up to scratch to meet customers' claims. While that will be largely invisible to the general public, it should stop insurance companies going bust in the manner of Equitable Life and Independent Insurance in recent years.

In two weeks the FSA will take charge of general insurance and protection insurance sales, advice and administration, embracing 36,000 firms from giant household insurers to vets who sell policies for your pet. But it will not include travel insurance or extended warranties worth less than £500.

Above all, "significant and unusual exclusions" must be pointed out. There may be scope for insurance brokers to argue the toss with the FSA's view of what is significant and unusual.

And next summer the FSA will crack down on with-profit insurers who lumber policyholders with massive penalties for daring to take their money out when a fund is on the rocks and not paying bonuses any more.