IFAs are probably hoping stakeholder proves an elaborate April fool.
Stakeholder could prove disastrous and at best will cause a great deal of pain for limited benefit.
Thousands will misbuy because the 1 per cent charge cap precludes advice. Several traps, including the relationship with state benefits and contracting out, have been left unsprung. Decision trees completely failed their consumer testing, with few bothering to complete them but the regulator brazenly claimed a success.
The FSA, DSS and Treasury are placing different emphases on advice. On a harsher interpretation, they have recently contradicted each other. Stakeholder also risks widespread blight because it ignores all proven sales channels.
It has brought the worst short termism from ministers when a U-turn on the 1 per cent cap was the honourable course while a small group of cheerleading providers allowed the Government to claim industry support when honest criticism was required.
It is also exposing the naivety of some national newspapers as they promote a “great deal for consumers” while providers are pulverised in the act of providing it.
Bizarrely, many IFAs will still prosper, shifting to fees, cross-selling to employers or finding consumers, daunted by the mess, paying for advice. Yet for some firms it will be a stake through the heart.
The saddest thing about the stakeholder is it is just three or four significant but easily taken steps from success. It is financial services' greatest missed opportunity in the last 20 years.