The closure of Axa’s deferred Sipp means advisers will have to generate a new application for clients who want to take their tax-free lump sum.
Clients can transfer into The One from Winterthur but this would be classified as a new transaction so the adviser would have to search the whole of market before making the transfer. This means that Axa would claw back the initial commission.
Concept Financial Planning managing director Paul Richardson says: “This creates extra paperwork with discharge papers and new application forms. The Winterthur product has a more restricted fund range and the process of transferring could take more than four weeks, meaning clients will be disadvantaged.”
An Axa spokesman says: “At the point the decision was made to close the plan, much effort was expended to ensure the move to The One from Winterthur did not unnecessarily impact either the client or adviser.”
Axa says set-up charges for the new product will be waived, as will the first annual drawdown charge, so “significant concessions” have been made.
It adds that advisers can earn new initial commission on the Winterthur product and says transfers can complete in 14 days, depending on complexity of assets held.