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Firms see stakeholder as &#39non-event&#39

Low levels of stakeholder awareness among British businesses is a clear indication of the need for financial advice, according to research by Axa Sun Life.

Axa surveyed nearly 600,000 businesses with five or more employees. It found that of the 359,400 firms without a emp loyee pension sch eme, two-thirds did not realise they will have to offer access to a pension scheme by October 2001. Of the full 600,000, up to 230,000 do not know what they must do to comply with new legislation.

The survey proved IFAs are the most popular source of advice for stakeholder, with 35 per cent of respondents saying they would turn to an IFA first and only 9 per cent of businesses indicating they did not need stakeholder advice.

Sun Life says its research also indicates businesses believe the introduction of stakeholder pensions is a non-event. It says more promotion within the business community is needed.

It believes the pension industry faces a challenge to work with the Government to inform business about stakeholder requirements and to encourage take-up among employees.

Axa Sun Life head of business development Steve Bur gess says: “The Government is looking to create an advice-free environment for stakeholder with decision trees. Nevertheless, our research shows that the need for advice clearly exists.

“There are legitimate reasons why a product with a higher charge than 1 per cent maximum for stakeholder would be acceptable to a customer. Group personal pensions are one such popular alternative but the requirement to issue reasons why not stakeholder letters when setting up an alternative scheme could prove to be a barrier to providing better benefits to customers.”

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