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Aifa stakeholder advice call

Aifa says the FSA should inc- lude availability of advice as part of the suitability criteria when advising on personal pensions to take into account the lack of IFAs selling stakeholder products.

Responding to the FSA’s consultation paper on Suitability Standards for Advice on Pers-onal Pensions, Aifa says IFAs and whole of market advisers are rightly expected to recommend the most suitable products.

But the majority of IFAs cannot afford to sell stakeholder products, arguing that the 1.5 per cent charge cap effectively excludes the cost of advice.

Aifa says the availability of advice should therefore be included as a factor in determining the most suitable pension product for a client.

It is reiterating its support for the scrapping of RU64, the rule requiring financial advisers to explain in writing why the personal pension they have recommended is at least as suitable for the customer as a stakeholder pension.

Deputy director general Fay Goddard says: “All the evidence to date suggests that without full advice, people simply will not buy pensions. The regulatory regime should allow for the cost of advice to be met through the product and this would benefit those who can only contribute low amounts.”

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