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HBOS to shun basic advice

HBOS Financial Services is shunning basic advice and will continue to offer full advice on stakeholder products through its Halifax branch network from April 6.

The group is launching the Halifax cautious managed fund, to be run by sister group Insight Investment, as its default stakeholder medium-term savings product on the same date.

HBOS was one of several providers and distributors which tested the basic advice regime with the FSA but it has come down firmly against offering it itself.

Halifax Financial Services managing director Ray Milne says the group has the scale to offer full advice and will continue to do so. The basic advice regime is seen as too basic and could potentially disadvantage customers, he adds.

Take-up of the basic regime has been very limited, with few IFAs interested and the threat of indemnity claims from potential misselling putting off many bancassurers.

Milne stresses cost is not the issue for Halifax as the combined group has one of the lowest customer acquisition costs in the industry.

He says: “I would be surprised if, come April 6, 2005, we are the only bancassurer providing stakeholder products with full advice.”

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