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Government needs some advice on stakeholder advice

With Treasury economic secretary Melanie Johnson claiming stakeholder does not need advice, IFAs probably don&#39t know whether to laugh or cry.

Johnson has already said as much about mortgages while the spin doctoring over axing polarisation has denigrated advisers.

This issue of Money Marketing sees Nick Bamford, an IFA with over two decades of pensions experience, providing the answers to 20 questions he believes any adviser should know before selling stakeholder. Hardly simple.

The Government is also ducking the issue of contracting out and the minimum income guarantee while the pension credit will penalise lower-income savers at the equivalent of higher-rate tax.

But at least Johnson lets IFAs know where they stand. Three pensions ministers have argued that advice can be included within 1 per cent. Things are now in the open and IFAs will probably have to learn to live with this regime. But there is a strong chance that a future Labour Government will rue its cavalier attitude.

Thousands have lost their jobs because of stakeholder while, amazingly for such a cautious Government, it may also be forcing itself into a corner on compulsion by making private pensions unsellable.

As for the Treasury, as junior ministers jump on the “Catmarketing” bandwagon, it comes perilously close to giving advice.

If the Government really wants to replace IFAs with its own stamp of approval, it should do the decent thing and undertake to compensate with public money the consumers who misbuy.In the meantime, buyers beware.


In sickness and in health

IFAs can expect to be targeted by providers of income protection policies in the near future. Income protection is low on the list of products currently sold by most IFAs but that might change in the post-stakeholder landscape. Given the withering of state provision and the corresponding onus on individuals to take care of themselves, […]

Julian Gibbs

It is good to see GE Life, part of the biggest company in the world by market capitalisation, back in the high-income plan market. It has a clear goal – to be the first-choice provider of financial services and products to the over 50s – and these plans are an ideal investment for them. The […]

N2 put back again

The date the FSA will receive its full authority was pushed back once again last week as Treasury economic secretary Melanie Johnson announced N2 will not occur until at least the end of November. Johnson also confirmed that mortgage regulation will go live nine months after N2 in August 2002. The legislative process of the […]

LIA offers fee-free deal

The LIA is allowing former Prudential, Sun Life Financial of Canada and Britannic salesmen to suspend their membership subscriptions for up to six months following recent redundancies. The LIA is writing to members, confirming they can suspend subscription fees for six months or until they find new employment without affecting their membership. Up to 5,000 […]

'Feeling the Squeeze'

Royal London carried out a UK wide survey with 2,500 consumers age 35-44 over the summer. The survey found that over a third, 34 per cent, said their finances felt Squeezed and so were struggling to meet day-to-day expenses, despite 87 per cent being aware that they need to save more. However, the survey did […]


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