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Clerical Medical back for good

Clerical Medical has returned to the commission-based group pension market after an absence of almost two and a half years because its systems could not cope with the amount of business it was attracting.

The company is now set to woo IFAs with new features on its group pensions such as online fund valuations for members and a simpler joining procedure. Instead of the long paper trail generated by letters passed back and forth between IFAs and Clerical Medical, the application process can be completed online.

There are group stakeholder, group personal pension, group money purchase and group additional voluntary contributions options aimed at companies with at least 10 employees. A range of 24 Clerical Medical funds and 13 externally managed funds are offered.

The Clerical Medical funds include five funds managed by Insight, the investment arm of Clerical Medical&#39s parent company, HBOS. There are also 15 specialist funds, three risk-graded lifestyle investment programmes and a unitised with-profits fund. The external funds are managed by Schroders, UBS and Newton

It has not been possible for Clerical Medical to offer with-profits and external funds on this contract because of the 1 per cent charging cap. The other pension options are not tied to the cap, so employees have greater investment choice and the increased workload this might mean for IFAs is catered for through flexible commission options which are negotiable.

While IFAs may appreciate the effort Clerical Medical has made in improving its systems and the flexible commission structure on this product, the company will have to work hard to regain IFA business that it has lost to competitors in the last couple of years. Also, at a time when the multi-manager concept is the latest buzzword, external fund links to only three managers may appear limited.

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