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Reducing the savings gap

I am delighted at the robust defence of independent financial advice by the Consumers&#39 Association.

I also applaud their recommendation for a new maximum commission agreement. What a shame that previous governmental stupidity did away with the original. The current state of play confirms what the majority (of non-voters) believe – “it does not matter who you vote for, unfortunately the Government always gets in”.

I would suggest that any new agreement be termed a “capped commission agreement” as clearly the DTI took the word maximum to mean that we had rigged the system to pay us more.

So let us keep things as simple as possible for them, can we? I find even the most financially obtuse individual can understand and appreciate the benefits of a capped rate mortgage.

Also, as regards the savings gap that is clearly taxing the minds of our leaders, I have just reviewed the life, critical illness cover and PHI of an individual who had policies taken out with one of the big four banks circa 18 months ago.

I have been able to re-broker them for better quality policies with more features and provisions at a saving to the client of over 30 per cent. This is not unusual.

Rather than giving the banks the ability to multi-tie, it would be better to force the banks to release their client banks to IFAs so that we could then act on behalf of the individual and save them money.

If this were done on the understanding that the savings made were to be just that, saved, such a strategy would go a long way to reduce the savings gap.

Ridiculously naive? I agree – but no more so than CP121.

Clive Hammond

Medical & Professional, Salisbury, Wilts

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