Pensions minister Jeff Rooker says 95 per cent of stakeholders must be sold without independent financial advice, opening doors for a major assault from direct US sellers
And Rooker says compulsion will be considered within 'four or five years' if at least half the 5m target audience feel unable to use the decision tree.
Major US pension providers now hope to storm the pensions market using superior electronic know-how such as the internet and touch-tone telephone technology.
Speaking at the unveiling of the tax consultation paper for stakeholders, Rooker effectively sounded the death knell for personal pensions and defined contribution occupational schemes.
He is forcing them to run parallel with stakeholders competing head-to-head with the 1 per cent annual charge stakeholders.
IFAs admit unless Rooker changes his stance they could see the majority of their pension business wiped out.
Rooker says: "We want people to find it easy to buy a stakeholder without the need for them to go and see a financial adviser. We are talking about 95 per cent using a decision tree."
The decision tree will provide a questions and answers route to buying a stakeholder, cutting out advice. It is expected to be available as part of stakeholder packages.
Lincoln National Corporation, second biggest seller of 401(k) stakeholder -style pensions in the US, wants to join at the stakeholder launch in April 2001 believing it will eventually be compulsory. It says it could bypass its UK subsidiary "if it makes financial sense".
The largest US 401(k) provider The Principal Financial Group, which has more than $105bn assets under management, is also moving in.
Lincoln technical service manager Brian Chilver says: "Stakeholders are likely to lose money for between ten or 12 years – accounting from the US may make better sense. We can run it on a system based in America.
"Advice is going to be almost impossible to envisage within 1 per cent."
Michael Philips partner Michael Both says: "With parallel schemes, the personal pensions market will be dead for us and there will be no room for selling stakeholders."
Aon Consulting principal Tom Ross, who chairs the Government-backed Stakeholder Pensions Advisory Group, says: "I cannot see how personal pensions can survive. It will sharply reduce the scope for IFA business."