Ron Sandler's review is causing some toing and froing at Hargreaves Lansdown, which says it agrees w...
Ron Sandler's review is causing some toing and froing at Hargreaves Lansdown, which says it agrees with some recommendations, but disagrees with others.
Topping Hargreaves list of favoured recommendations is the proposal for a new range of stakeholder products, which it says should give a welcome boost to the stakeholder and CAT standard world.
The company also favours the implementation of a two-tier advice system, which it says should broaden the availability of low-cost advice for consumers currently priced out of the market.
Hargreaves agrees that this is likely to lead to a reduction in the number of people trading as IFAs, although not necessarily a reduction in the number of advisers overall.
Sandler's proposals on with-profits products also receives a big thumbs-up from Hargreaves, which says it has ceased recommending any such investments precisely because of the criticisms raised in the review.
It adds that the changes proposed to the with-profits regime calls into question just how many insurers will want to continue in this market.
The ideas put forward for a stronger definition of mis-selling, better consumer education, better IFA investment knowledge, better harmonisation of tax or VAT rates across different product classes, the shortening and simplification of KFDs, and the simplification of mini and maxi ISAs also receive support from Hargreaves.
Where Sandler falls down, however, is in the idea that tracker funds are the solution to poor investment returns caused by expensive active fund managers.
Hargreaves says Sandler has fallen into the trap of using past performance to justify expectations of future returns: good stock picking in the next 10 years is far more likely to provide higher returns than just following the index.
The company also takes great offense to the idea that low income earners should be discouraged from buying into pensions products, which it says will clash with the idea of compulsion that Pickering is expected to outline in two days' time.
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