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LIA fears fallout from fees

The LIA is warning that people directed to IFAs by decision trees will be put off by the fees they are asked to pay.

The warning comes in the LIA&#39s latest submission to the FSA on CP61, the consultation paper on decision trees.

Public affairs director John Ellis claims fees could amount to £300 per client.

In the submission, Ellis outlines a scenario in which people going to an IFA after completing a decision tree give up once they realise they will be charged a fee “if they have not already given up in the earlier stages”.

The FSA has admitted many people quickly abandon decision trees through boredom.

The LIA is calling on the FSA to address its concerns about this process of “disintermediation”.

It says the problem is most acute when stakeholder is sold on an individual basis.

It wants the FSA to work out a suitable reward for intermediaries which can be factored into stakeholder.

Ellis says: “We see this process of disintermediation as the nub of the dilemma over stakeholder pensions and it would be very helpful to have comments from the FSA on this.”


John Charcol – Three-Year Fix

Friday, 29th September 2000.Fixed term: Three years.Fixed rate: 5.89 per cent.Minimum loan: £75,000.Maximum loan: Up to 75 per cent of valuation subject to a maximum of £750,000.Income multiples: 3.5 times principal income plus second or 2.5 times joint.Arrangement fee: £444.Redemption fee: 3 per cent of advance for first three years.Conditions: None.Introducer&#39s fee: Nil.Tel: 0800 718191.

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