Intermediaries need to recognise stakeholder-style pricing models are unsustainable and rethink how their business operates or risk serious financial damage, warns Scottish Life.
Using analysis from a report by Cazalet Consulting, Scottish Life is highlighting what it says are the inevitable consequences of the “stakeholder pricing model”, which operates with only an annual management charge (AMC), and which allows the policyholder to stop contributions or switch to another provider at any time without penalties. The stakeholder model only works if policyholders keep their plan going for most of its intended lifetime, but Alasdair Buchanan, group head of communications at Scottish Life, says the charging structure means there will almost always be an incentive for...
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