IFAs are piling pressure on the Government for a straight answer on advice and stakeholder.
Bristol-based Chancery Asset Management IFA Barry Cash has waited more than five months for a Government assurance that guidance on making modest contributions to a stakeholder or personal pension will not constitute bad advice when taking into account the minimum income guarantee.
Troy French and Partners IFA Peter French has written an open letter to Treasury economic secretary Melanie Johnson demanding a justification of her assertion that advice is not required for stakeholder.
Cash wrote to Chancellor Gordon Brown in October, asking for assurance that by advising certain clients to make small contributions to a PPP or stakeholder they will be better off than relying on the Mig.
In a response from the DSS, Cash was told people earning less than £10,000 are unlikely to be in a position to fund their own pension. But the letter also admits: “There is still work to be done ensuring people make the right choice when think-ing about a pension. Ministers are working closely with the FSA to ensure the interaction with the Mig is properly add-ressed as part of the sales and marketing process for stakeholder pensions.”
Cash says: “The DSS's response left me none the wiser. The issue needs pinning down.”
A DSS spokesman says: “It is a valid point. We would not want people to save into a stakeholder if it is not right for them. People have to look at the information they have very seriously before making a decision.”