Bee says that raising the charge cap to 1.5 per cent does nothing to alleviate the suitability issue which has hamstrung stakeholder sales and if stakeholder was suitable for all, then it could be rolled out in bulk with a charge of 0.3-0.5 per cent.
He says neither the 1 per cent regime nor the forthcoming 1.5 per cent offers margins to support full advice. Bee wants a removal of means’ testing and the introduction of measures to make pensions universally suitable, such as pound-for-pound matching on savings, to
enable advisers to offer stakeholder to entire workforces without having to offer full advice.
Bee says IFAs currently dare not offer stakeholder in the workplace without providing full advice for fear of future misselling claims and, rather than tackle the macro picture, the Government is intervening at the product level.
“If you want to deliver stakeholder in bulk, you need to make pensions intrinsically attractive to all at the macro level. Once you have got that, then the market can devise the product. If the suitability issue remains though, stakeholder will be almost irrelevant,” he says.