But there will still be a decent range of choice.Child Tax Credit will rise by £65. Stock market-based investment is the key to good performance in CTFs, and we are offering guidance to help parents select the best investments for their children’s future. All you need to do is telephone 0800 800 008 asking for Child Trust Fund free advice.”The long-awaited Stakeholder initiative will also take its bow in April, giving access to a suite of simple, low-cost and hopefully risk-controlled savings and investment products. They should open an account with an approved provider as soon as possible.The trouble is, where do they sign? The biggest fund manager in the UK, the US-owned Fidelity, only last month said it was not going to offer a CTF account.One of the few big players to step forward is F&C.Among the smaller intermediaries, the Share Centre is offering all Independent readers the chance to receive free advice on share dealing through a Child Trust Fund. Gavin Oldham, chief executive of the Share Centre, said: “I think CTFs can do a lot to spread the word about shares. It will drive the high-networth client to the independent financial advisers (IFAs), and the banks will take out the risk.
But the banks have never been good at selling their own products, let alone anyone else’s. They are about the worst place you can go.”All financial firms have to be operating under the new regime by 1 June. Between now and then will be a transition period, in which some firms will conform and some will not That alone could turn out to be a tricky phase. Many IFAs are switching over from charging commissions to charging fees, which could slash their income in the short term as their clients adjust to that. Some are expected to tough it out: others may fold or sell themselves to rich parents, as they have been doing for the past couple of years.One of the first products banks will have to sell will be Gordon Brown’s new Child Trust Fund (CTF), which will take effect on 6 April. Vouchers are being issued this month: £250 for each child born on or after 1 September 2002, and £500 for children whose families qualify for the full Child Tax Credit – that means having a household income of less than £13,480.Vouchers and explanatory packs go to the parents or guardians of every child for whom child benefit is claimed.
Even IFA Promotion, the body which the financial services industry pays to bat for financial advisers, has said the changes risk confusing consumers.The main consumer protection will lie in two new documents. The commission must be compared with the market average on that type of plan. We shall see in the next few months whether all that information is going to shield a customer from the wiles of a determined but unscrupulous seller.Mark Dampier, of the adviser Hargreaves Lansdown, said: “I expect it will be what it was when it was in force before, a free-for-all mess I definitely don’t think it will give more choice. The other details the cost of getting that advice and whether it will have to be paid through commission or fees.