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91% fear misselling of stakeholder suite

The vast majority of Sofa and CII members are concerned that there will be widespread misselling if the current regulatory framework is slashed to accommodate the Sandler review&#39s stakeholder suite of simplified products.

A survey of 3,000 members from both bodies reveals that 91 per cent are either concerned or very concerned about what will happen if financial product distributors are permitted to do away with the “know your customer” and “suitability” requirements.

Seventy-five per cent of respondents to the survey, which was carried out in the days following the publication of the Sandler and Pickering reviews, do not think that Sandler&#39s proposals will make much difference in encouraging consumers to save more. Fifty-six per cent do not think Pickering&#39s ideas will improve individuals&#39 pension provision.

Only 28 per cent of res-pondents think the IFA market will shrink by more than 30 per cent over the next three years.

Nearly 80 per cent believe IFAs should be qualified to AFPC or above, which is perhaps not surprising given that most Sofa members are at the higher end of the qualification scale.

Fifty-five per cent think the new distributors who would be selling the safe-haven products should meet at least FPC level of qualifications, going against Sandler&#39s vision which would see the products sold off the shelf with little or no advice.

Sofa managing director Brian Lawless says: “There seems to be the view that there should not be unqualified advisers as this would increase the chances of massive misselling. We are very much of the view that advisers or distributors should be professional and compelled to maintain competence.”

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