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Little hope of improvement with new-style with-profits

Advisers do not believe the next generation of with-profits products encouraged by Sandler with a 100/0 policy holder/shareholder split will be any improvement on the current model.

On the back of a series of bonus cuts, IFAs are fairly evenly split over whether the new-style withprofits would be effective but 51 per cent say they think the new products would be no improvement on the traditional model.

With-profits “the sequel” has been developed as a simpler version of the product, making it easier for clients and advisers to see what is being invested and where.

The new products would be ringfenced, with transparent charging structures.

Hargreaves Lansdown pensions research manager Tom McPhail says: “I am genuinely surprised by those results because in the long term, these new-style with-profits funds are the only way forward.

“If this is the case, then the underlying prospects for the with-profits sector do not look good.

“Yes, there are a lot of negative connotations which are attached to the withprofits name. Hargreaves Lansdown stopped promoting with-profits last summer and we are certainly not enthusiastic about them.”

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