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Generation gap is opening up at Friends

Friends Provident is under pressure to review a decision to issue new policies for increments on regular-premium pensions after IFAs&#39 complaints they cannot be paid for advice following tax changes.

IFAs say they have sold the plans on the basis of the pre-April 6 non-stakeholder contracts which includes waiver of premium on incremental policies.

But the decision by Friends to issue New Generation stakeholder policies for increments has left IFAs with reduced commission and their clients unable to take waiver on their increased premiums.

The IFAs also say that Friends failed to warn them of the changes before they agreed remuneration with their clients, which means they may not be paid for ongoing advice unless clients agree an additional fee.

Birchwood Financial Services IFA Keith Sharp says: “No warning was given of these changes and they have materially disadvantaged regular-premium customers.”

Larch Financial Services IFA Beata Chelkowska says: “I am locked into an agreement with my client, which is an information technology company. They have not costed in a penny for fees for advice on any scheme changes.”

Friends head of stakeholder strategy Paul Stanbridge says: “We needed to adjust the commission and offer it at a level appropriate to 1 per cent.

“The issues have been discussed in a seniorlevel meeting although no decisions have been taken yet.”

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