Friends Life unveils RDR plans

Friends Life has announced how it plans to facilitate adviser charging across its corporate benefits, retirement income, Friends Provident International and protection ranges.

For corporate benefits, the insurer has developed a charging modeller tool which will allow advisers to assess the potential impact of adviser charging at scheme level. It is also developing a toolkit to help advisers with setting up auto-enrolment schemes on behalf of firms.

Friends Life will offer a range of consultancy charging options through its flexible retirement account on the corporate wrap.

Adviser charging will be facilitated on some annuities as either a percentage of the fund after any tax-free cash has been taken, or a flat fee.

Fees will continue to be facilitated on individual full Sipp drawdowns where adviser fees are paid from the Sipp bank account.

A fee facilitation service will be launched on 1 October for lifetime care products, Friends Life’s long-term care range. Illustrations will be offered on a nil commission basis with the option to add an advice charge to the premium.

Adviser charging will be facilitated on Friends Provident International investment products open to new business in the UK, including the reserve advance, succession planning bond and reserve products, for top-ups on policies previously sold in the UK. Overseas products are unaffected.

Commission will continue to be offered on individual protection business. Advisers wishing to charge for protection advice through the product will be able to show quotes where the premium is reduced in increments over time to reflect the agreed fee.

Group protection products will continue to offer commission and facilitate adviser charging.

Friends Life is reviewing the legacy products under its Heritage business and says it may add adviser charging on certain products next year depending on adviser and customer demand.

Friends Life managing director of corporate benefits Colin Williams says: “RDR is a landmark moment for the financial services industry and everyone working within it. We are fully supportive of the increased standards and transparency the reforms will bring and we are working to make it as easy as possible for advisers to make the changes required.

“We are focused on making the Friends Life proposition as simple as possible, so as to ensure a smooth transition into the post-RDR world.”

Essential IFA managing director Peter Herd says: “Providers need to be flexible in ensuring advisers can be paid in the way they want to be paid post RDR. If a provider does not offer that flexibility in facilitating adviser charging the adviser will go elsewhere.”


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There are 3 comments at the moment, we would love to hear your opinion too.

  1. Pyramid selling outfits rule OK

  2. I’ve just come back off hols and very relaxing it was too. Nothing has really changed has it, our industry is still struggling to cope with the imposed RDR commission ban and the changes being imposed, Mifid2 is throwing everything into confusion in the EU and a significant number of older more experienced IFAs are still planning on leaving the industry post 2012.

    The decline goes on, Honister is just the first of many collapses due in the next 12 months, hundreds of thousands of clients, possibly millions, will be left wondering what the hell in going on in the Financial Services Industry and no firm plan to mitigate the problems with networks being too big for their boots.

    Maybe the solution is too apparent and sensible to be considered as viable.

    All IFAs to be individually authorised, the network contracts to be constructed to provide compliance and audit services for a set fee level, rather than a percentage of earnings, the accounting for fees and legacy commissions to be placed into individual accounts under a master trust account, which does give administrators any rights over the IFAs earnings except for the contractual fee levels due to the network and each IFA to negotiate individual PI insurance for their practice based on their practices risk profile.

    Simples !


    Too many vested interests by network owners for them to give up their powers and control. They would have to justify their charges (just like we will have to do post 2012) as reasonable.

    Once again – NEVER HAPPEN!

    If this structure was adopted, a few rogue IFAs committing fraud or virulent mis selling, would not be able to put the rest of the networks iFAs businesses in jeopardy.

    Once again – NEVER HAPPEN! Too damn sensible.

  3. I don’t care what Friends’ is doing. After years of poor service on existing clients placed with them when they were a mutual, I shall continue not to deal with them.

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