Stakeholder-style products are likely to help plug the saving gap for high rather than lower earners, suggests evidence from Datamonitor, because providers will not provide them unless they earn sufficient profit from premiums.
A survey of IFAs and product providers by the research firm alleges consumers would need to contribute premiums worth around £200 if gaining advice through an intermediary – according to one-third of IFAs questioned – as the 1-1.5% earnings from such premiums would only then pay the distributor, the fund manager and still make a profit. Even purchasing products through banks and insurers is likely to require premiums of between £50-150 a month in order to generate sufficient capital to cover costs, says Janette Weir, lead financial analyst at Datamonitor. "This means many providers ne...
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