View more on these topics

Commission cost concern at Standardised pensions

Standard Life is set to reprice more of its pension contracts on stakeholder terms, sparking claims it is holding a closing-down sale to drum up business before the change.

It is believed to be offering IFAs commission of up to 140 per cent of Lautro rates on contracted-in money purchase schemes to write business now before it lowers its charges.

Standard was criticised by IFAs for using the same tactic in the run-up to stakeholder when it announced it was changing its GPP contracts to stakeholder-style levels.

The company says it is unfair to penalise existing customers with higher charges following the introduction of stakeholder and will announce repricing plans next month. It says a period of transition where old charges apply is inevitable.

IFAs are raising questions over how the commission is funded and whether with-profits policyholders are paying for Standard&#39s aggressive tactics.

Richard Jacobs Pension & Trustee Services director Richard Jacobs says: “This looks like a closing down sale. This is buying business at its worst.”

Informed Choice managing director Nick Bamford says: “Standard&#39s switch to stakeholder charges on GPPs was a tremendously positive move for customers. But the opportunity to receive commission on old charging structures was exploited. Who pays for it and what are the long-term effects? Standard will have had to cost this thoroughly.”

Standard Life assistant general manager (marketing) Simon Douglas says: “There is no intentional plan to create a window of opportunity to incentivise IFAs to sell business. When you are making changes to contract terms, you put in place pipeline operations which give IFAs time to adjust.”

Recommended

FSA sought clarity after confusion on fund suspensions

The FSA called for clarity from UK investment firms last week as confusion reigned in the IFA community over which funds remained open for trading.On Wednesday, the day after the terrorist attacks in the US, the majority of fund managers suspended all funds with significant exposure to closed markets – principally US, Far Eastern and […]

Flats in demand with 10% buy-to-let yields

Buying property to rent is becoming an increasingly popular way to boost investment portfolios, according to Bradford & Bingley.In its autumn residential lettings report for investor landlords, B&B says buying to let can provide a gross return of up to 10 per cent of the property value and offers strong capital growth.The survey looks at […]

Tories announce front bench appointments

New Conservative leader Ian Duncan Smith has completed his front bench team, including those relevant for the financial services industry.Shadowing the Treasury will be former Home Secretary Michael Howard opposite Chancellor Gordon Brown. Howard Flight, who co-founded City fund manager Guinness Flight will return as shadow economic secretary, the portfolio most responsible for the industry.David […]

IFAs split as Hargreaves sends out &#39sell&#39 mailing

IFAs are divided over whether clients should sell out of equity funds in the aftermath of last week&#39s US terrorist attacks and subsequent market slump.In a mailshot distributed last Friday, Hargreaves Lansdown advised clients to bail out of poor performing investments in favour of cash or gilts.Chief executive Peter Hargreaves said he believes US consumer […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment