Standard Life warning on dual charge against Nest
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Standard Life believes that providers looking to offer a dual-charge structure to recoup commission costs on corporate pensions may struggle to justify their products against the nat-ional employment savings trust.
Nest will have a 0.3 per cent annual charge plus a 2 per cent contribution charge until the scheme’s set-up costs are met.
Standard head of pensions policy John Lawson says: “Providers have capital strain from paying out commission. With a contribution charge, they can get that back more quickly but it is a double-edged sword because selling a dual-charge scheme against Nest may be difficult for advisers to justify, especially if the FSA issues a comparability diktat.”
Aegon head of corporate pensions Neil Davies says: “A combination charge can deliver better returns for members over the longer term but it would not be fair to compare the level of charges in the private sector directly with Nest as Nest does not make any provision for the cost of advice.”
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Readers' comments (1)
Julian Stevens | 25 Mar 2010 5:16 pm
Who gives a toss what Standard Life has to say about anything any more? I certainly haven't since they shafted us back in 2001 on all the PP's we'd written with them during the 90's.
Any life office still talking about commission on any sort of investment product clearly hasn't woken up to the brave new world of CAR, which isn't nearly as intimidating as some people seem to think.
But a 2.3% AMC ~ plus, let us not forget, whatever the investment charge turns out to be ~ is such a throwback to the last century that it's almost laughable.
Labour can't even come up with its own national stakeholder plan ~ how perverse is that? The sooner Old Labour's kicked resoundingly into touch the better.
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