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Majority of advisers see future for simplified products

by: Thomas Smith
  • 11/12/2014
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Majority of advisers see future for simplified products
Advisers support the introduction of simplified products, with 79.4% seeing a place in the market for them, a survey has found.

Among advisers 51.7% believed simplified products could help with closing the advice gap, while 44.7% believed they would help to close the gap.

Those saying simplified products would not help close the gap accounted for 3.6% of the 836 advisers surveyed for Old Mutual Wealth’s Adviser Insights Survey.

Ian Jefferies, life cover expert at Old Mutual Wealth, said: “While simplified protection is a bold solution to a serious problem, it is important that simplicity does not come at the expense of quality.

“The 2013 Sergeant Review of Simple Products illustrated that some simplified products run the risk of offering poorer quality cover by excluding certain benefits.

“Simplified products should be those which make it easier for customers and advisers to purchase cover without compromising quality.”

The survey also found support among advisers for reform of the Inheritance Tax (IHT) with 44% supporting lifting the threshold for IHT to £1m.

Abolition of IHT was favoured by 11.5% of advisers, while 28% supported the primary home being excluded from IHT.

Of advisers, 13% did not support reforms to IHT.

Rachael Griffin, financial planning expert at Old Mutual Wealth said: “Inheritance tax could be a key battleground approaching the next general election and David Cameron has already indicated that the Conservative party is likely to consider reform.

“The problem with IHT is that many individuals caught under the current £325,000 threshold will feel they are leaving a relatively modest inheritance to their family and yet it will be subject to a tax which is ostensibly supposed to target wealthier individuals. Advisers appear to feel the same way, with the majority supporting IHT reform and only a small number (11.5%) arguing that nobody should pay IHT.”

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