Fear and ignorance in the target market will be a major obstacle to the success of stakeholder, says research from Nottingham University Business School.
The report by the school's Financial Services Research Forum says at least 40 per cent of the population are unsure about pensions, with the vast majority from stakeholder's target audience.
One of the report's authors, Professor David Knights, says, without advice, stakeholder will not be a success and IFAs are unlikely to get involved unless they work on a fee-paying basis.
He believes the reason why the Government has put pressure on the FSA to relax polarisation, allowing multi-ties for stakeholder, is because it recognises that most IFAs are unlikely to sell the product.
But many consumers mistrust product providers and they are unlikely to make plans for their future, says the study.
Knights says: “Stakeholder will not be sold through the normal process where IFAs give advice for commission. The 1 per cent limit will create a problem. There will not be any financial incentive for IFAs to sell it. The Government, having realised this, has forced through the relaxation of polarisation.”
IFA Wentworth Rose managing director Philip Rose says: “It is confirmation of what we all know. Having forced companies to offer access to stakeholder, it gives the Government the perfect springboard to go for compulsion.”