At last a few facts about the new stakeholder regime. The price is 1.5 per cent of the annual management charge for the first 10 years from April 2005.
Products can be sold by lower-level advisers with decision tree and script who must be attached to a regulated business. The threat remains of ombudsman referral – a major cost.
Most advisers, according to a Money Marketing Online survey, remain unlikely to sell the new pension any more than they did previously, nor will most PIMS delegates. Most delegates will not set up a lower-level advice team but a few will. IFAs continue to question whether there is a mass market to tap at any price and worry about means testing.
Providers were not envisaging significant commission increases but a bigger marketing spend. They still worry about profitability estimated at nine years and still longer than most private companies would wait for a return on capital.
The conclusion – better news but it won't set the world on fire.