FOR tracker bond and pension providers, 1996 was the best of times for others, including life assurance and pensions brokers, the past year could not have been worse.

In an industry that mainly continues to regulate it sell, the Tony Taylor affair shook consumer confidence in brokers and personal investment.

Will 1997 see the introduction of an independent regulator for the investment industry, as was called for by many politicians, consumer groups and even the Director of Consumer Affairs? The recent Investment Intermediaries Act may go some way to preventing future episodes of fraud and malpractice, but as the Taylor experience has shown, the self regulators require supervision consumers need to be convinced that their money is safe if put with so called independent brokers and advisers.

The Irish Insurance Federation expects the Government in 1997 to extend the regulations within the Sales of Goods and Supply of Services Act to allow for increased transparency and disclosure of charges of insurance related investment products. "We never had a problem with disclosure," said an IIF spokesman. "Our problem has been more one of presentation and the format of the disclosure."

Until this vital legislation goes through, a modest gesture will be made to improving the general standards in the insurance industry. From January 1st, the sales staffs of IIF member companies will be subject to mandatory competency testing.

Based on the Life Insurance Association foundation course, the test will, among other things, include assessing their knowledge of product design, the wide range of investment funds and how they work, as well as technical ability - such as calculating the tax implications of pension funds or long term savings schemes.

The IIF's registration of intermediaries will also continue throughout 1997; there are already 10,000 names on the register, which has been compiled to allow insurance companies to keep track of sales people. In an industry where staff turnover is notoriously high, the register allows companies to screen new applicants more carefully and theoretically, to help weed out incompetents or fraudsters.

But not everyone is so convinced about the onset of full disclosure: some brokers, like Mr Paul Overy of the fee based advisers FEN, and the mutual life company Equitable Life, which does not pay broker commissions, says they would welcome full transparency of the cost of life and pensions products for the full term of the contract.

"The way in which commissions are being adjusted on personal pension products looks like better value at first glance upfront commission is reduced to 50 from 60 per cent and annual renewal commission drops from 4 per cent to 3 per cent but it works out exactly the same in the end."

On the product front savers and investors can expect more stock market tracker bonds and other single premium products in 1997. Most industry sources admit tracker bonds have replaced the ubiquitous managed fund as the most popular savings product for ordinary lump sum savers with one or two new ones introduced practically on a weekly basis during 1996.

Essentially a deposit product that exposes only a small portion of the investment to futures options, tracker bonds are satisfying the still strong desire by investors to protect their capital. With a small portion of the fund taking futures options in the performance off certain stock markets, they also offer the possibility of an equity related gain.

Brokers and investment managers believe 1997 will again be dominated by the sale of trackers, but they also see a resurgence in short to medium term single premium bonds (with profit and unit linked), more guaranteed pensions for older contributors and more interest in new regular premium savings policies in which charges are spread rather than front loaded.

"I expect trackers will become more sophisticated next year, says Ms Sinead Burke, investment manager with IPT Sedwick Dineen. "Clients are looking for not just a minimum guarantee, but minimum returns as well. Designs like Ulster Bank's Multiplier, in which a 44 per cent net return was guaranteed if the two stock market performed to a certain level, was, very attractive and I think we'll see a lot more of that sort of thing this coming year."

There is a problem, she adds, with making trackers too complicated since it will frighten off those thousands of investors who would otherwise put their money with the post office But the more sophisticated investor is showing clear signs of returning to single premium bonds that don't necessarily offer capital guarantees abut which are so "blue chip" that the risks of losing their entire stake are small.

"No one can say when the bubble of high returns will burst," says Ms Burke, "but if, someone is prepared to take the medium to long term view, five to 10 years at least they shouldn't be too afraid of the timing of when they get into what is a cyclical market."

Special Investment Accounts, (SIAs), in which there is a high exposure to Irish stocks and low DIRT tax rates are also expected to be more heavily promoted in 1997.

At their annual financial briefing recently, AIB investment managers repeated that an Irish tracker bond "is not a possibility" since the market here is too small for option providers to take an interest, but that Irish investors certainly have had opportunities to enjoy the soaring returns from the ISEQ, by investing in SIA's - in AIB's case in the form of a PEP from Ark Life, their life assurance arm.

While the single premium market looks well positioned for 1997, the customer with modest, regular savings can probably expect a few more options to appear on the market in 1997, not just from the traditional life assurance outlets, but from the deposit takers as well.

ACC Bank's innovative new education plan, introduced last spring, may very well be copied by other banks (it offered a premium interest rate once savings reached £1,000).

"I think we can also expect more innovation from the deposit takers in providing more regular income accounts," says Mr Douglas Farrell of National Deposit Brokers, who cited - Anglo Irish Bank and the Irish Nationwide as coming up with the most flexible, high yield income accounts in 1996.