Like many other IFAs, I had been thinking of writing a letter along the lines as that of Peter Richardson, in which he derides the Government's idea that people will save more if the marketplace is flooded with Government-approved cheap and cheerless products.
But I decided not to bother, for the simple reason that these products will be no more successful than stakeholder and need not concern me.
I shall not sell them and nor will I recommend clients to seek out an organisation that does. Just because something is cheap does not make it good.
A seal of Government approval is more likely to put people off a product than to attract them to it.
As I have said before, you cannot have a Mercedes for the price of a Lada. The majority of people buy something like a Vauxhall, a Ford or a Honda because it represents the best balance between quality and value. How can the Government not see this?
In the wake of the stakeholder pension fiasco, any product providers which create and try to market yet more money-losing stakeholder-type products should be regarded with the gravest of reservations, particularly in this era when solvency margins are under greater pressure than ever before. For most providers,I believe that stakeholder products represent commercial suicide and the only providers able to wave two fingers at them are those who have genuinely better things to offer which are worth paying reasonable charges for.
Nothing in this world is for nothing. How can the Government not realise that this applies to financial products as much as to anything else?
On a different note, have you seen the new FSA logo? It would be interesting to know how much of our money was spent on its creation.
WDS Independent Financial Advisers,