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Commission can be better for pensions

Axa’s Simon Olive makes a strong case for advisers to move to a fee-based business model in the article, Fee spirit, (Money Marketing, May 5).

But he ignores one key aspect completely. For individual contributions to a pension plan, the commission-based approach is far more tax-efficient on a like-for-like comparison.

This is because the cost of the IFA’s services are effectively reduced by 22 per cent or 40 per cent – depending on whether the individual is a basic-rate or higher-rate taxpayer – by taking the costs from the product, for example, commission. Why would any individual want to pay by a fee in such circumstances?

Alasdair Buchanan

Group head of communications, Scottish Life, Edinburgh


Firms set to switch from Neptune fund

New Star and other fund of fund managers’ plan to withdraw their money from Neptune’s European opportunities fund and follow former manager Barry Norris to Britannic, where he is running the new Argonaut European alpha fund. The moves could see the value of the Neptune fund halve from 28m to 14m.

Norwich Union – Norwich Manager of Manager Cautious Fund

Type: OeicAim: Growth by investing globally in equities, fixed-interest securities and cashMinimum investment: Lump sum 5,000, 3,000 for Isas and Pep transfers, monthly 100Investment split: 33.33% UK equity, 16.6% UK corporate bonds,13.33% UK government bonds, 5% European equity, 5% US equity, 4.65% global bonds, 3% Asian and Pacific equity, 1% emerging markets, 1% Japan equity, […]


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