Most investors will miss the upward bounces of the FTSE next year, according to Rowanmoor Pensions joint MD David Seaton.
He predicts the stock market will move upwards in a series of bounces throughout the year, with the FTSE closing at 4,800 by the year end. However he says most investors will be too afraid to re-enter the market and will therefore miss out on possible gains.
Commenting on the pensions market in 2009, Seaton also believes the FSA will come to terms with what a SIPP is and will provide clear guidelines to stop abuse of the products.
"SIPPs" will be operator schemes where the member has the power to direct investments in assets other than collective investments," he says.
"IFAs will need to demonstrate proper independence and use of one provider wrap will become unacceptable," he adds.
Seaton also thinks the government will have an important role to play next year, claiming it will come under increasing pressure with legal action over the discriminatory age 75 rule.
He believes their attack on high net worth and high income families will create a greater demand for advice from financial advisers.
"The Family Pension Trust, or Family SIPP, will become a main stream product for financial planners working in this field," he says.
"Despite the Government's control of banks and the instruction to continue to lend to SMEs and small businesses, directors will continue to find that in practice borrowing will be very restricted.
"SSAS, which have the ability to provide loanbacks, will continue to be an important product for this sector. Some financial advisers may be sued by directors wrongly sold a SIPP when a SSAS would have been best advice."
First mentioned in Cridland Report
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