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Aviva calls for rethink on consultancy charging

Aviva has called on the FSA to review the combined effects of pension reform and consultancy charging, warning it is likely to reduce choice and access to advice in the group personal pensions market.

In its response to the FSA’s Retail Distribution Review consultation, Aviva says the proposed removal of provider factoring will promote levelling down.

Corporate and consumer director Graham Boffey says: “We agree with the principle of introducing consultancy charging into this market to add transparency. But we are concerned about the complexity of applying consultancy charging in the group market in a fair manner.

“This market is likely to change significantly with the introduction of auto-enrolment and the National Employment Savings Trust in 2012 and we recommend the FSA assesses the overall impact of this and the RDR on the group and corporate pension market to ensure the combined impact does not lead a loss of customer choice.

“In particular, Aviva is concerned the proposed removal of provider factoring will lead to a reduction in the amount of advice available to employers, which in turn will result in them taking a default non-advised pension option for their employees. This levelling down is likely to result in less advice and choice for employees.

“We strongly recommend the FSA considers the combined impact of pensions reform and the RDR to ensure these changes do not result in customer detriment.”

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Neil Jones is technical support manager with Canada Life’s ican Technical Services Team. Canada Life offers a range of wealth management solutions, including retirement income planning, estate planning and investment solutions from a choice of jurisdictions, including the UK, Isle of Man and Republic of Ireland. The residential nil-rate band (RNRB) was first announced in […]

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