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Simplified products set to hit the market

A raft of simplified products designed to be sold without advice, pensions from investment firms and cleaned-up with-profits could hit the shelves following publication of the Sandler report.

Sandler&#39s three-piece “stakeholder suite” would consist of a mutual or unit-linked fund, a pension and a cleaned-up ringfenced with-profits product. These products would have an initial price cap of 1 per cent, strictly regulated charges and limited investment risk.

The “stakeholder” with-profits plan would need to conform to strict rules on transparency and charges which could be extended across all with-profits funds.

A proposed new tax reg-ime could rekindle investment companies&#39 interest in offering pensions via the Individual Pension Account while at the same time removing the tax advantages enjoyed by life companies.

Sandler has also laid into active fund management, claiming the average unit trust underperformed the market by 2.5 per cent and that IFAs choose active funds more than institutional and direct investors.

The Abacus director Phi-lip Martin says: “There is a difference between safe products and products that can be sold without advice. Sandler has simply exten-ded the stakeholder and Catmark idea.”

Jupiter joint managing director Steve Glynn says: “The report seems to stress the potential for a one-size-fits-all product. That would be a misselling scandal waiting to happen.”


&#39Need for standard misselling definition&#39

Ron Sandler has called on the FSA to come up with a standard definition of what constitutes misselling to provide IFAs and providers with greater certainty as to what is acceptable practice.In his report Sandler says there needs to be more information about misselling because of its importance in the regulatory framework. It points out […]

Firms get tailored help in Raising Standards

The Pensions Protection Investments Accreditation Board is offering a service to help firms seeking accreditation under the Raising Standards initiative.The new set-up stage in the accreditation process builds on experience gained during the first wave of accreditations in the scheme&#39s first year of operation. Brands will get help in preparing efficiently for accreditation and receive […]

Don&#39t take your eye off the business ball

The reform of UK financial services, a process we confidently predict will never end in the working lifetime of most IFAs, continues apace this week as Sandler and Pickering publish their views.IFAs are set to suffer collateral damage in the cause of getting the great “unsaved” to put some money away and will take some […]

Investors take the rough with the smoothing

While I understand the argument being put forward by Hargreaves Lansdown over the sale of with-profits bonds, I totally disagree with its view.Hargreaves argues that if stockmarkets rise, life companies will use profits to boost their financial strength rather than pay all these profits to policyholders. In this case, Hargreaves should never have been recommending […]


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