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LIA says stakeholder needs &#39the hard sell&#39

The Life Insurance Association believes stakeholder can be a money-spinner for IFAs despite the 1 per cent charging cap.

It says IFAs can rake in money if they harness the group pension market and adopt hard-sell tactics.

President Peter Sprung says discussions with providers have indicated that commission within the 1 per cent charge can be as high as 60per cent of the Lautro ratesof commission.

Although this is half the current commission for personal pensions, the LIA believes IFAs can profit by doing group business with employers and by taking the hard sell.

Sprung says the commission rates are available from most of the top providers, “giving choice both to consumers and advisers”. He calls on direct-sales life offices to offer this remuneration to their advisers. The LIA represents IFAs and tied agents.

But Sofa spokesman Robert Reid warns that these commission rates are a “double-edged sword”. He says advisers should be wary of using companies which pay commission that cannot be supported by charges.

The LIA will be holding workshops to show members how to get the most out of stakeholder. Sprung wants to get DBS co-founder and demon salesman Don Westacot to host a training day.

Sprung&#39s comments were made in an article which will appear in the next issue of the LIA magazine Prospect.

LIA public affairs director John Ellis says: “We asked companies what they were prepared to offer. We had assumed it would be low but it turned out to be not as low as expected. IFAs can make money by increasing the volume of business they do.”

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