The 1% price ceiling for Sandler's suite of stakeholder products will not work as it will not attrac...
The 1% price ceiling for Sandler's suite of stakeholder products will not work as it will not attract providers to offer products, says the Investment Management Association in response to the Treasury's consultation document on simplified products.
The government's paper Proposed product specifications for Sandler "stakeholder" products , which was released today, has opened for debate the issue of a 1% price cap on simplified products.
The IMA is urging the Government not to impose this price ceiling for charges. The IMA says that the scheme will only be completely successful in attracting lower income sectors of the market to the new product range, if the scheme is able to attract product providers as well.
IMA's chief executive Richard Saunders said, "Just as the CAT standard ISAs had next to no impact on the market, so these products will be a flop if a 1% price cap is imposed."
The IMA has also accused some of the Government's proposals as falling short of best practice in protecting consumers.
Saunders said, "It is quite wrong, for example, to contemplate exit charges. Simple investment products should be open ended and free from early redemption penalties."
The government is welcoming responses to the consultation document by 2 May 2003.
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