A guide to stakeholder friendly pension products is being featured on an IFA website in order to giv...
A guide to stakeholder friendly pension products is being featured on an IFA website in order to give other IFAs guidance before the launch of stakeholder products.
The site, located at www.stakeholderpensions.co.uk, aims to provide both IFAs and the consumer with information on stakeholder pensions. Its first initiative has been to commission a survey from Synaptic Systems on what product providers are offering as appropriate vehicles before April 2001.
It has highlighted companies that offer penalty free transfers into a stakeholder, either one by the same group or any other group, in green. Those that offer one or the other are rated in black, while groups in red do not have a stakeholder-friendly product.
Chris Dixon, managing director of IFA firm Square Mile which is behind the site, said: "There are many problems for IFAs associated with stakeholder. If an IFA is not fully up to speed on what is friendly or not then the implications of PIA RU 64 could mean they will have to do a review in three years. Also, IFAs are advising some clients to go into a stakeholder-friendly product that offers commission at the moment. When stakeholder comes out in 2001 they may then have to contact all their pension clients to make sure they are not in an unsuitable product.
"IFAs will be spending money to inform clients that they should move to a product that doesn't offer anything back to the IFA. Some pensions will claw back that initial commission and there may be nothing to replace it. Some could go bust."
It is still unclear on what level professional indemnity insurers will offer cover. Scottish Life is one of the groups featured on the site that does not offer a stakeholder-friendly personal pension.
The group said it does have a group personal pension that came out before update 64 but in the light of this is not going to launch a pre-stakeholder plan.
It argued that pre-stakeholder products are being designed to be broken within two years and it would not be interested in selling that type of plan.
Alasdair Buchanan, marketing manager at Scottish Life, said: "We decided that the only way a pre-stakeholder could be balanced would be to subsidise one group of customers at the expense of another."
Putting the tech into protection
Square Mile’s series of informal interviews
Fallout from Haywood suspension
Launching later in 2019
£80bn funds under calculation