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Jacobs warning on stakeholder switch into Personal Accounts

Advisers selling stakehol- der pensions face compoun-ding their losses on this bus- iness by being forced to move their stakeholder cli- ents into Personal Accounts, warns Pensions IFA Richard Jacobs.

The director of Richard Jacobs Pension & Trustee Services says many advisers have sold stakeholders with only a long-term prospect of making any profit.

He says if and when Personal Accounts are rolled out, advisers will have to review all their contracts with existing stakeholder clients and advise them to move to Personal Accounts, for no commission.

Jacobs, who says stakehol-der forms a significant part of his business, warns it will be difficult, if not impossible, for advisers to justify keeping these clients in stakeholder contracts once Personal Accounts are introduced.

Jacobs says: “We have done the right thing by our clients and not advised them to go into higher-charging products. But despite this we will have to turn around to our clients and tell them to go into Personal Accounts. Many advisers will lose business.”

Personal Finance Society public affairs director John Ellis says: “Advisers have tended to see stakeholder as an individual product when the opportunities lie in the corporate area. There is still an opportunity for them to advise employers on Personal Accounts.”

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