Aegon has warned advisers of the possible dangers of installing Nest for small firms on a loss-leading basis.
Last week, Nest managing director of customer and proposition Graham Vidler said it is encouraging advisers to help small and medium-sized businesses set up the scheme.
When asked how advisers could charge for this “delegated access” service, Vidler said they could levy an upfront fee or offer it on a “break-even” or free basis as a loss leader and make money selling other services.
Aegon UK regulatory strategy director Steven Cameron says: “The RDR is all about advisers being really clear with their clients what services they will provide and how much those services will cost. It would be unfortunate if that clarity becomes diluted. This kind of arrangement muddies the waters.”
Vidler says: “A range of intermediaries are seeking to deploy our delegated access function using different approaches. Some charge fees for advice and implementation, such as helping with communications and administering Nest. Some offer administration of Nest on a ‘break-even’ basis, then charge fees for other services.
“We are not suggesting advisers load the cost of advising on Nest. We are simply highlighting the innovative ways intermediaries are seeking to provide support and are structuring their business in light of the opportunities automatic enrolment can bring.”