The arguments seem to be mounting yet further as to whether or not IFAs can survive in the era of Cat-standard and therefore nil or low-commission-paying stakeholder schemes.
A number of the bigger players will enter this market willingly but, to date, Scottish Life and Skandia have announced that they will not produce stakeholder plans.
Surely, in order to put a commercial reality into the consultation process, other life offices who are as yet sitting on the fence should be encouraged to at least make their decsision public as quickly as possible on whether or not they are going to offer a stakeholder plan.
For those who are, particularly the mutual offices, the cost implications should be made public to the with-profits policyholders (and shareholders for proprietary offices) of having to take a long-term (potentially seven to 10 years) view as to the commercial risks/rewards (if there are any) of actually introducing a stakeholder plan at all.
Critical mass for this exerciuse is vital. The smaller providers in particular should be encouraged to, in effect, boycott stakeholder on the grounds that they are putting their current policyholders ar risk by pursuing a very high risk strategy if they want to offer stakeholder pensions.
If the market ends up being restricted, maybe advice is not necessary.
The question then is, how big do you need to be?
Hunter & Co,