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Friends uses cap rise to boost stakeholder cash

Friends Provident will buck industry trends and offer an increased rate of commission on the individual stakeholder personal pension it is bringing to market next quarter.

The company is launching both stakeholder and non-stakeholder versions of a new personal pension in May and will use the additional 50 basis points that providers are allowed to charge on stakeholder from April to fund a higher rate of trail commission than on its existing 1 per cent contract.

Head of pensions marketing Jeremy Ward says the commission increase, which is still being finalised, will be in line with the increase in the stakeholder charge cap so could be up to 50 per cent up on current levels.

Friends Provident slashed commission rates at the start of this month on its individual stakeholder pension policies from 40 per cent of Lautro rates to 10 per cent following similar moves by rivals including Norwich Union, Standard Life and Scottish Equitable.

Ward says: “We will be paying more for renewal for the 10-year period if the IFA chooses to go for the 1.5 per cent charge for the first 10 years.”

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