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Family of new stakeholder products proposed

A new family of priced capped, catmarked stakeholder-style products should be created for sales outside the currently regulated advice structure according to the Sandler review.

The products would be price capped at one per cent and cover a mutual fund or unit linked life fund, a pension fund and a with profits product with consideration given to a protection product. The products would also carry no initial charge, strictly regulated surrender charges and limits on investment risk.

Review chief Ron Sandler says the one per cent price cap is sustainable because the products would be sold outside the existing advice channel.

He also argues the products would have a similar level of protection to other products except for the suitability criteria.

There would be no requirement for those selling these products to be qualified to FPC3 standards but sales would require the prospective saver to be given a number of plain English warnings.

Those on low incomes or in occupational schemes should not invest in the pension product.

Plans for this group of products, were first revealed by Money Marketing in May in an interview with then Secretary of State for Work and Pensions Alistair Darling.

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