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Complex trees are &#39best advertisement for IFAs&#39

The FSA&#39s long awaited discussion paper on stakeholder pensions has been hailed as the best-ever advertisement for independent financial advice.

Politicians, IFAs and pension providers are united in their belief that the draftdecision trees are so complicated and contain so many hidden hazards that they will push people into seeking professional advice.

The trees were originally designed to replace the need for financial advice. Now providers describe them as a major obstacle which may prevent the average person taking out a pension. The draft decision trees included in the paper run to more than 20 pages and contain lots of “pitfalls” where consumers are warned to seek advice.

But pension experts fear that many would-be stakeholder investors will be put off taking out a pension by the sheer scale of the trees – even before any attempt to negotiate their way through them.

Clerical Medical pension strategy manager Nigel Stammers says: “These are the best adverts for independent advice ever. The trees are lengthy and complicated. They also require consumers to make judgement calls in areas such as the minimum income guarantee and contracting out. Even where there is no existing pension provision, I suspect a large number of people will realise they need to seek profess-ional advice.”

Scottish Life communications manager Alasdair Buchanan says: “These genetically modified decision trees area horrible mutation from the original tree first mooted in the consultation papers. They prove even more conclusively of the need for advice andare doing more for IFAs than anything else that has been done for them since 1988.”

Conservative Shadow economic secretary Howard Flight says: “Decision trees are unwise and absolutely no substitute for advice. I have been in correspondence with Howard Davies about them being no substitute for advice and he agrees. I fear people may well end up going for the wrong option.”

Wentworth Rose managing director Philip Rose says: “These trees prove that you cannot give financial advice by putting it down on paper. They are not trees, they are forests, they will take over an hour to explain.”

A new Government report rates a Catmarked Isa asvirtually the equal of a personal pension. In the new round of the propagandawar for stakeholder, Jo Gill looks at the frenzied Catfight

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