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Cherrypicking time as the stakes prove too high

As stakeholder topples another provider, advisers must be concerned about the possible domino effect.

Scottish Amicable has called a halt to up-front commission on stakeholder. It is not leaving the market but its product is no longer aligned with a large number of IFA businesses. Clerical Medical, another IFA arm of a big organisation, has pulled out of the GPP and company stakeholder markets temporarily, with scepticism over whether it can claw its way back. The irony, which should not be lost on the Government, is that Clerical partly blames its refusal to cherrypick for the move.

Axa is considering its commission strategy but it is the remaining pension giants which IFAs should look to with trepidation, especially because it was meant to be the group market which would help IFAs cope with stakeholder.

There is little point blaming the pro-viders if they cannot make the numbers add up, although Money Marketing would urge any provider to make sure their sums add up for direct or multi-tied business before abandoning IFAs and not simply believe their own hype.

Among IFAs, those moving a proportion of their business to trail commission or fees or who have diversified will be the best equipped and others should consider a move in this direction. It may be unpalatable but on such low margins it is probably essential they cherrypick. But a great deal still depends on what the likes of Standard Life and Norwich Union do now.

One thing IFAs must not do is stand still. It is probably not an option anyway as the ground is already shifting beneath their feet.

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