Social Security Secretary Alistair Darling is predicting a boom for IFAs as younger clients seek advice on where to invest money from their maturing “baby bonds”.
As the election enters the final week, Money Marketing interviews the social security spokespeople of the three main parties on their pension and savings policies.
Conservative social security spokeswoman Jacqui Lait says Tory plans for scrapping savings taxes for all but higher earners will dramatically boost savings while promising to allow young people to opt out of the state pension.
Liberal Democrat spokes-man Steve Webb says the LibDems will ensure a good income in old age for everyone by making private pensions compulsory while voicing grave misgiving about polarisation reforms.
Darling says he expects IFAs to see more young clients as they seek advice over where to invest the money from their Child Trust Funds, outlined in the manifesto, dubbed baby bonds by commentators.
He says: “Our proposals are aimed not only at spreading financial wealth more widely but also at increasing financial awareness. As with any financial decision, people should have the advice that is appropriate to them. That may well be from an IFA, who may find that the average age of their customers goes down, as every 18 year old has a trust fund to invest.”
Aifa director of policy and technical services Fay Godd-ard says: “It is encouraging that Darling is recognising the importance of IFAs. If investment advice is needed, the IFAs are the best placed, and it could possibly be done on a fixed fee basis.”