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L&G admits it pushed for the 1% regime

Legal & General is coming under fire from IFAs for boasting that it actively promoted 1 per cent charges on stakeholder from the outset of the planning for the product.

L&G says it was the only insurance company at the Government&#39s earliest working parties on stakeholder agreeing with a 1 per cent charging cap.

In a break from much of the rest of the industry, L&G claims stakeholder can be sold without advice, despite admitting that decision trees in their current form have flaws.

It says decision trees filter out people needing advice from those who do not, reducing costs and allowing providers to operate within the 1 per cent charge cap.

Head of public relations John Morgan says: “We knew changes were coming, so we implemented them. Any intermediary who feels a person with no pension needs full advice on whether they buy a pension is incorrect. People who need advice will get it but they should not be charged for what they do not need.”

Informed Choice managing director Nick Bamford says: “Stakeholder is not a simple product. It is a cheap product. Believing cheap means simple is incredibly naive.

“Once you take advice out of the equation, you are on dangerous ground. L&G should not marginalise the distribution channel that has been the cause of its success.”

Torquil Clark pensions development manager Tom McPhail says: “L&G seems to have been pursuing its own agenda at odds to the rest of the industry.

“They have been distributing direct to the public and not taking account of their IFA business.”


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Around 40 pension providers will be on the starting line in the stakeholder race following acceptance of their entries by Opra. The amended stakeholder regulations came from the Government at the very last moment but held little to delay preparations for the launch. There is little margin for error in the regime imposed on providers […]

Star fund manager quits for Australia

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Charge chaos as firms face busting cap

With stakeholder launching this week, the issue has forced Legal & General to promise it will dip into its own pockets to meet charges in excess of 1 per cent that are expected to arise if higher-charging external funds outperform lower-charging options. Royal & Sun Alliance says the issue is one of the key reasons […]

&#39Stopgap&#39 Catmarks for LTC, says Treasury

The Treasury says it may introduce Catmarks for Long Term Care products as a “stop-gap” measure until full regulation is likely to comes about in two years time. The Government&#39s consultation on LTC regulation closed last week and so it says no decisions have been made yet. But speaking at a conference, Delivering Long Term […]

Tax year-end planning with the family

From the Technical team at Prudential Let’s face it, many aspects of financial planning involve a lot of technical detail. At our face-to-face events, we’ve had great success bringing these technical topics to life through the use of practical case studies. Meet the family Prudential’s Planning Matters hub brings together a fictional family and explores […]


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