The cost of switching from one stakeholder provider to another could be as high as £200 per scheme, ...
The cost of switching from one stakeholder provider to another could be as high as £200 per scheme, according to Chris Dixon, managing director of online information service stakeholder.co.uk.
Dixon said firms that have not adopted an electronic platform for their transactions are ignoring the cost of transfer losses to existing policyholders.
He claimed that policyholders of non-stakeholder products would probably end up bearing the brunt of costs that were incurred by stakeholder policyholders' freedom to move from one provider to another without charge.
Even companies that have invested heavily in an electronic infrastructure to reduce administrative costs will suffer if the firms they are dealing with do not have a comparable system.
Dixon said: "Companies dragging their heels over implementing new systems will cost even those firms at the cutting edge of technology. Providers haven't taken a step back to look at the realities of costs."
Dixon said he thought the price of setting up new policies could be up to £100 when technology was not used. The price could double if clients chose to transfer their stakeholder scheme between two providers that are using outdated technology.
John Morgan, head of communications at Legal & General said groups have been working hard to ensure business systems can operate in the sub 1% margin.
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