Fidelity is urging the Government to scrap plans to impose a price cap on the stakeholder suite of savings products, arguing that it should abandon efforts to dictate to the market.
Managing director Richard Wastcoat says investors' needs are too complicated for Ron Sandler's “simplistic solution”, which it warns could leave the Government facing ano-ther misselling scandal.
He says that as most investment products are sold, not bought off the shelf, providers require more flexibility.
Instead of the cap, Wastcoat says the Government should put its faith in the “tried and tested” method of a broad and competitive range of goodvalue investment funds. He agrees with the Treasury select committee's assertion, made last week, that by lowering Isa limits in the 2006/07 tax year, the Government is sending out the wrong signals to investors when it has pledged to close the savings gap.
Wastcoat says: “We have repeatedly argued that inv-estors' needs are too complicated for Sandler's simplistic solution. Investors need information and advice on where to invest. When it comes to the 1 per cent price cap, the Government has yet again missed the mark and could end up with another misselling scandal in years to come.”