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Top-level backlash building against Sandler&#39s proposals

A high-level backlash against Ron Sandler&#39s recommendations is under way, with a senior economic adviser to the Government and the FSA chairman criticising the proposals for a family of simple “stakeholder” products.

Speaking to Money Marketing last week, Downing Street economic adviser Dr Ros Altmann said that two weeks after the publication of the Sandler and Pickering reviews, the Government was no further towards motivating more people to save.

In a speech to the FSA&#39s annual meeting in London last week, chairman Howard Davies said it will be difficult to free up conduct of business regulations to design “stakeholder” products without risking widespread misselling.

Altmann, who was speaking in a personal capacity, but has close links with the Downing Street policy unit and Tony Blair&#39s personal economic adviser Derek Scott, said simple products without advice or some other form of persuasion would not work.

She rejected the conclusion by Sandler that Government incentives have not been successful in increasing savings and said it is up to the Government to get more people saving. Providing incentives through tax relief is one of the most effective ways of accomplishing this, she claimed.

Altmann said: “I am not convinced simple products are enough on their own. There needs to be a combination of simple products and further Government incentives. Two weeks on from the Sandler and Pickering reviews, we are no closer to convincing more people to save.”

Davies said: “There is some difficult work still to be done on product features to ensure that it is possible to free up the conduct of business regulations without the risk of widespread misselling.”

Aifa director general Paul Smee says: “These comments seem to show how much more argument there is to be gone through before Sandler&#39s prescription could be adopted or even modified.”

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