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Sandler wants advisers to sell stakeholder suite

IFAs will be among the primary distribution channels for the new suite of stakeholder products, with alternative distribution channels only developing over time, according to Ron Sandler.

His recommendation of the creation of safe-haven products got the official blessing of the Treasury last week at a Government-sponsored seminar in London, where Sandler pointed to IFAs and other salespeople as being the distributors for the products.

Sandler said he expects other distribution channels such as high-street retailers to develop in time as the market for the products matures but it will initially be down to IFAs and tied advisers to sell them.

However, Sandler&#39s view appears to contradict that of the regulator. Speaking at the same meeting, FSA managing director John Tiner said the regulator is minded to go for a decision tree-led, non-advised method of distribution.

Tiner also repeated the FSA&#39s concern that scrapping regulation of the sales process under Sandler&#39s proposals inc-reases the risk of misselling.

This has led to many in the industry suggesting that there will be some limited conduct of business rules for advice, meaning the ability to cut regulatory costs will be limited.

But industry figures poured scorn on Sandler&#39s views, claiming IFAs will not get involved in a market where they cannot make any money because of the 1 per cent cap. Sandler says: “Initially, the products will be sold on a face-to-face basis by IFAs and other saleforces.”

Aifa director general Paul Smee says: “I cannot see a business or motivational proposition to go out and sell the products in a 1 per cent world.”

LIA head of public affairs John Ellis says: “They want a lower-level conduct of business regime but not no conduct of business regime. But then how do you strip out the costs? We do not want misselling and we do not want misbuying but we are being told it is too expensive to prevent these things from happening.”

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