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Johnson says no advice is needed for stakeholder

The Treasury has taken its toughest line yet against advice with a letter to Conservative MP John Randall from economic secretary Melanie Johnson saying stakeholder does not need advice.

It has provoked a furious response from the industry who warn there is a risk of widespread misbuying. The move comes as the Treasury is about to appoint a new managing director at the FSA directly responsible for IFAs.

The letter suggests stakeholder can be bought off the page without any advice.

The FSA&#39s decision trees recommend investors to seek advice over stakeholder if they have doubts about the options.

In the letter, Johnson says financial advice is not a necessary condition for all savings products.

The letter says: “Catmarked products and stakeholder are products whose standards mean investors should be able to get a good deal without needing to pay for financial advice.”

ABI media manager Vic Rance says: “All financial products benefit from advice but in a 1 per cent world it will be difficult to provide. A lot of people do not understand financial products. Even with the simplest products, it is helpful to see an adviser before a decision is reached.”

LIA director of public affairs John Ellis says: “This is another example of the misguided Treasury view that they can remove advice and everything will be okay.”

Norwest Consultants principal Harry Katz says: “She does not need advice because she knows what to do with her money but others are less fortunate.

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