But not every authorised stakeholder sales agent is offering its own plan. Many have taken advantage of new rules which allow tied advisers, normally restricted to selling the products of just one company, to sell other providers' stakeholder schemes. If you go to your bank for a pension, you could now face a bizarre scenario. If a non-stakeholder product was your best bet, the tied adviser could only offer advice on his own product. But if a stakeholder pension suited you better, the now multi-tied adviser could offer products from a panel of providers.
Elms points out that there is already widespread confusion about stakeholder pensions.
By introducing multi-tied advice for stakeholder pensions, the government is whispering in changes that will make it harder for people to identify truly independent financial advice,' Elms says. But the plans are unlikely to be better than a company plan because employers' contributions aren't required. In the worst case, advisers believe, some investors who buy stakeholder pensions could eventually find themselves as financially disadvantaged as those who were wrongly advised to buy personal pensions in the five years following the launch of these plans in 1988. Moreover, since most investors are expected to open a stakeholder pension without taking financial advice, those who lose out will not be able to claim compensation. However, the Financial Services Authority, the UK's chief City regulator, remains sanguine about the risks involved in changing the current rules on financial advice, known as polarisation.