With the 1 per cent charge being the real focus of stakeholder design, one way providers may gain an edge in the group market is to give employers the facility to administer schemes via the internet.
Of an estimated 36 group personal pension providers, only 10 are offering group stakeholder- friendly plans. Of the 10, Friends Provident, Norwich Union, Scottish Mutual, Standard Life and Winterthur Life have the facilities for schemes to be administered online.
Online admin is the process by which the providers prepopulate their back-office systems with the payroll data for each scheme. The advantage of online admin is that data for employees can then be extracted to create application forms, assist with member enrolment, create key features documents and collect premiums. It gives employers access to their scheme details and allows them to be changed online.
In an online environment, IFAs still have an important role to play. With this in mind, Friends Provident, Norwich Union, Scottish Mutual and Winterthur Life allow IFAs to access client's scheme details through the IFA's website.
Comparing the charges of providers that have online systems to those that do not, three companies have broader ranges of annual management charges within the 1 per cent cap. Friends has annual management charges ranging from 0.4 per cent to 1 per cent, Norwich Union 0.5 per cent to 0.9 per cent and Scottish Mutual 0.6 per cent to 1 per cent.
But Scottish Amicable and Scottish Widows' plans exceed the 1 per cent charge cap with ranges of 0.9 per cent to 1.35 per cent and 0.65 per cent to 1.5 per cent respectively.
In the fight for market share, high-street names will give the traditional product providers a run for their money. But so far, the only high-street player to enter the group stakeholder-friendly ring is Abbey National. With less than a month to go before stakeholder plans can be registered with the Revenue and Opra, IFAs will find they will soon be overwhelmed with choices.
