Govt scrutinises pre-RDR auto-enrolment 'advice rush'
The Government is scrutinising the auto-enrolment advice market ahead of the RDR deadline for evidence of a “rush” to sell products on a commission basis.
The analysis will be undertaken once the Department for Work and Pensions has gathered evidence from the Association of British Insurers on how advice fees are being structured for group personal pensions.
A Government source says: “We are interested in making sure people get value for money from their pensions and that charges are fair and transparent to the member.
“We are keen to know if there is a rush to sell products before the end of the year to take advantage of commission.
“If we find that this is the case and members are being auto-enrolled into a scheme that is not value for money then that would inform our thinking on any possible legislative action.”
Earlier this year, pensions minister Steve Webb (pictured) accused advisers of “dissing” Nest, the low-cost scheme set up by the Government, and pushing clients towards scheme which pay commission.
He said: “Nest would be very suitable for many small and medium-sized firms but the IFAs and employee benefit consultants are not doing it.”
AWD Chase de Vere head of communications Patrick Connolly says: “There has been a lot of talk about a last minute commission rush but I have not seen any evidence of that materialising and I do not think it will.”