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Small company stakeholder exclusion good news for advisers


The Government has created an enormous business opportunity for IFAs by excluding smaller firms with less than five employees from stakeholder pensions according to Scottish Equitable.


This is because new Government rules on stakeholder exempt employers with under five staff from providing stakeholder.


The life office says these firms make up nearly two-thirds of UK employers and have nearly 750,000 employees who could be without pensions.


In the latest Ritchie Paper, Scot Eq pensions development director Stewart Ritchie says that while some of these unpensioned individuals will be low earners falling into the stakeholder target group, many will be high earners needing advice on pensions.


These high earners could include individuals who may need advice on a range of pension and investment plans, including executive pension and unit trusts.


Scot Eq believes IFAs should be contacting employers now to give guidance on the implications of stakeholder, which will provide them with the opportunity to talk to senior staff about other areas of financial planning.


Ritchie says: “The key message is that there is nothing to stop IFAs starting their stakeholder campaign now.


“As well as targeting larger employers without pension provision, and advising those with a pension schemes on necessary alterations, under-five employee firms should not be discounted.


“While some will be low earners, there are many high earning individuals employed in small companies such as specialist consultancies, who may require advice on individual pension arrangements and other investments.”

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