IFAs could be too afraid to sell personal pensions because of fears of justifying their advice through reasons why not letters, claim pension experts.
They predict personal pension sales will be artificially driven down by as much as 50 per cent as IFAs fear a retrospective review of personal pension sales after stakeholder.
The concerns have emerged in the final week for responses to stakeholder consultation paper 61 which covers regulating standards of advice.
The FSA states in the paper, in the majority of cases, stakeholder is more appropriate than personal pensions. Experts say this puts pressure on IFAs to sell the new pension.
Clerical Medical pensions strategy manager Nigel Stammers says: “Reasons why not letters will shift the balance between stakeholder and personal pensions to be 75/25 when it would be 50/50.
“The fear factor will drive the personal pension market share down as IFAs may be afraid of a retrospective review by the regulator of missold personal pensions post-stakeholder.”
Scottish Equitable pensions development manager Steven Cameron says: “We have not even seen stakeholder so it is presumptuous of the FSA to assume they will always be better than personal pensions, some of which are low-charging as well as offering tax relief benefits.”
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