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Friends Life reviews charge cap commission stance

Friends Life will review the payment of ongoing commission through corporate pension schemes ahead of a 0.75 per cent charge cap being introduced in April 2015.

The payment of commission to advisers, along with active member discounts, will be banned for auto-enrolment from April 2016 as part of a DWP clampdown on costs and charges.

Friends Life says it will continue to pay commission in schemes where the overall charge is below 0.75 per cent until the ban comes into force.

However, the provider will review the payment of commission for schemes with a charge above the cap once regulations are clarified by DWP later this year.

“Friends Life will pass back a cost saving to members through reduced charges in 2016 as commission is removed,” the firm says.

Friends Life corporate benefits managing director Colin Williams says: “The volume of change the workplace pensions industry has experienced in recent years is unprecedented.

“Since this shift began Friends Life has been focused on putting advisers and employers first, and our commitment remains as the landscape continues to evolve.  We believe our two-phased approach to the commission ban and charge cap will help all parties make this transition as smoothly as possible.

“We have focused on helping schemes prepare for the changes in good time whilst minimising disruption and supporting advisers as the new rules come into effect.”

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