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's 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.”