Type: Individual stakeholder pension
Minimum premium: Lump sum 20, monthly 20
Minimum-maximum ages: From birth-75
Fund links: Choice of 20 Friends Provident funds
Options: Transfer value account, protected rights account, pension credit account, pension for children option
Allocation rate: 100%
Charges: Annual up to 1.5% in first 10 years, thereafter 1%
Commission: Initial up to 10% of Lautro rates, initial up to 10% of Lautro rates plus 0.1% fund-based renewal, fund-based renewal only up to 4% a year, additional fund-based renewal in first 10 years up to 0.5%
Tel: 0845 7573 036
Friends Providents new individual stakeholder pension is compatible with the Governments revised maximum charge of 1.5 per cent a year, which came into effect on April 6.
Duncan Clark St Albans pensions director Bob Lawrence regards this as a welcome addition to the market as it appears to have everything an IFA would look for in a competitive plan. He says: “This looks an excellent, well thought out addition to the stakeholder/personal pension market. While there is a limited range of in-house funds for the stakeholder plan, there are still 20 funds in all, which is more than enough for the simple and straightforward stakeholder market.”
Looking at the positive features of the plan in more detail, Lawrence thinks the literature is excellent. “The charging structure is well thought out and takes into account the new upper limit for stakeholder plans 1.5 per cent for the first 10 years of the contract, with a useful 0.5 per cent fund-based renewal commission,” he says.
Lawrence points out that the revised charging limit for stakeholder pensions will enable Friends Provident to pay a slightly more realistic commission to advisers. “For the first time, Friends Provident has included lower charges for larger funds, which is a plus,” he adds.
Turning his attention to the potential drawbacks of the plan, Lawrence says: “There is nothing I can say that I do not like about the product it is something I could recommend. Hopefully, Friends Providents online facility to access full details of the plan will be available for this contract.”
Competition is likely to come from individual stakeholder plans provided by Norwich Union, Clerical Medical, Legal & General and Scottish Widows, according to Lawrence. He concludes: “The big test will be service from applications to policy issues and access to on-line information. If this is available on the stakeholder plan, Friends Provident should pick up a lot of business.”
Suitability to market: Good
Adviser remuneration: Average