The football season has started again. Mark Lawren-son said on Football Focus that the definition of optimism is a club's supporters at the start of every season.
There is less optimism with the Sandler report and the paper that we expect from the FSA shortly.
There has been a lot of debate on payment schedules for advisers and other matters such as transparency, clarity and simplicity for the consumer. These all seem generally sensible.
However, there is a distinct need for advice and therefore Misys networks believe in the need to advise clients on product selection and fund performance.
What we need to all debate is the suggestion of a stakeholder-style suite of products.
We know from first-hand experience that the Sandler team conducted a lot of research during the writing of the report. I am concerned that the message did not get through from the product providers competing in the stakeholder pension market that these products are very expensive to market. Not with regard to the consumer, who gets it all for 1 per cent, but on the providers and advisers through capital strain.
This has been highlighted over the last two or three months through stock market levels that have brought solvency levels on major providers into the spotlight.
Multi-distribution is a key issue for stakeholder providers, as is overall percentage share of the market.
That is why Norwich Union, Scottish Widows, Scottish Equitable, Royal London, Axa and Friends Provident can do so well.
But that is one product -a whole suite of products would be unworkable at 1 per cent.
In the original submissions by Misys on stakeholder, we were very clear that a charge cap of 1 per cent was ill thought out and 1.5 per cent as a minimum was possibly workable but even more than that was necessary to match marketing and advice with a good product.
At £3,600 a year maximum payments into stakeholder, what were we arguing as costs to the consumer in total? The difference between £36 and £53 a year. That would hardly be intrusive.
The charge cap needs to be increased to allow the market in general to continue with any hope of achieving a reduction in the savings gap of £27bn or whatever that level may actually be.
This is not just for the stakeholder contracts we have now but also for Isas and the potential new suite of products put forward by Sandler. One per cent is such a nice round figure but totally unrealistic.
The wholesalers, the life and investment companies, have set up costs and distribution costs which make the stakeholder and Isa products incredibly capital-intensive.
Increasing the current 1 per cent charge cap to 1.5 per cent will help, although the investment repayment timescales will still be many years into the future for providers.
It has to be done and done quickly but not to be perceived or positioned as a “win or lose” to the Government, regulator, product providers or advisers. It is simply a review required based on real experiences.
All advisers are ready to help close the savings gap. We are committed to transparency, suitability and simplicity.
But, and it is a big but, we need to allow enough margin in all of this to cover distribution and marketing.
Sandler was almost right, but the number of 1 per cent is following the crowd. Maybe when we have full electronic trading or end-to-end processing, this level of charge may be almost possible.
Until that time, the customer has to pay for the necessary costs to allow distribution and 1.5 per cent is needed now.
Andrew Bedford is director of marketing at Misys Networks