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Cap is unfeasible, say providers

Providers say Sandler&#39s admission that face-to-face advice will at least initially be necessary on his suite of savings products makes the 1 per cent cap unfeasible.

Following Sandler&#39s statement at the Treasury&#39s seminar last week, Norwich Union attacked Sandler&#39s proposals, claiming he did not do any work to determine if 1 per cent was viable and says there is no doubt that the proposed products will need to be sold rather than bought. Standard Life senior technical manager John Lawson says manufacturing and distributing savings products under a 1 per cent cap will mean an even bigger squeeze on margins.

Scottish Life head of communications Alasdair Buchanan says: “Sandler admitted that initially at least, face-to-face advice will be needed. As soon as off-the-shelf is replaced by the advice model, even in a simplified compliance regime, 1 per cent will be bust.”

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