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&#39Fear a big obstacle to stakeholder success&#39

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&#39s Financial Services Research Forum says at least 40 per cent of the population are unsure about pensions, with the vast majority from stakeholder&#39s target audience.

One of the report&#39s 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.”


Charge chaos as firms face busting cap

In a scramble to win market share ahead of stakeholder rivals, some of the biggest life offices may have blundered into offering plans flouting the 1 per cent charging cap. With stakeholder launching this week, the issue has forced Legal & General to promise it will dip into its own pockets to meet charges in […]

Govt Actuary in warning on compulsory income cover due to stakeholder effects

The Government Actuary says income protection insurance may need to be compulsory as a result of stakeholder.Speaking at a Unum-sponsored symposium on disability in London last week, Gov- ernment Actuary Chris Day-kin claimed many employers will no longer provide staff with protection for long-term illness or disability, leaving the Government to fill the gap with […]

PIA fines and suspends firms

The PIA has fined IFA The Pension Shop of High Street, Ripley, Surrey £40,000 and ordered it to pay costs of £10,000 for pensions review failings. It has also suspended the investment business of Dorset based IFA Capella Financial Services of Salisbury Road, Christchurch and Edinburgh based firm Wilson Insurance Services of Newhaven Road because […]

IFAs say Brown not doing enough to push savings

Less than one in three IFAs believe Chancellor Gordon Brown is doing a good job to promote savings and investment among the public. Thirty-six per cent believe pensions will be a growing part of their business and 25 per cent said they are seeing a decline in pension business despite publicity surrounding the launch of […]


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