View more on these topics

Get flexible with Standard Life

Standard Life – Personal Pension Flex

Type: Personal pension

Minimum premium: Lump sum £1,000, monthly £40, annual £400

Minimum-maximum ages: 1 &#45 75

Fund links: Sterling one, fixed interest one, index linked one, property one, protection one, structured one, managed one, ethical one, stock exchange one, international one, European one, Japanese one, North American one, Pacific Basin one, UK equity one, FTSE tracker one, Far East one, Standard Life global selector, Standard Life UK smaller companies, Deutsche managed portfolio, JP Morgan Fleming life moderate, UBS life managed, Deutsche Asset Management balanced, Baillie Gifford managed pension, Newton exempt global balanced, Newton managed, Gartmore European selected opportunities, Threadneedle American select growth, Fidelity special situations, Fidelity South East Asia, JP Morgan Fleming life global 70:30 equity

Charges: Annual up to 2% up to £24,999, up to 1.9% £25,000 – £49,999, up to 1.8% £50,000 and above

Allocation rates: 100%

Minimum term: Single premiums two months, regular premiums two years

Commission: Level 2.5%, renewal 0.2%

Tel: 0131 225 2552

Broker panel: –

Roy Andrews, Senior partner, Andrews Gwynne & Associates

David Divers, Principal, Sandringham Investments

Anton Robinson, Director, City Asset Management

Terry Stevens, Proprietor, Centre Financial Services

Broker ratings: –

Investment options 6.5

Flexibility 8.5

Company&#39s reputation 9.0

Past performance 5.5

Charges 6.0

Commission 5.5

Product literature 5.5

Standard Life has introduced its personal pension flex, a personal pension with a choice of internal funds and external funds from Baillie Gifford, Deutsche, Fidelity, Gartmore, JPMorgan Fleming, Newton, Threadneedle and UBS.

Looking at how the plan fits into the market, Andrews says: &#34It is a fairly standard personal pension plan, but with a fair degree of flexibility.&#34 Divers feels that it is necessary for all companies to upgrade their product, he says: &#34Standard Life is ahead of the field in this process. The product shapes up well in this new poststakeholder environment.&#34

Robinson thinks the plan will fit in well, as Standard Life is one of the big players in a decreasing market place. Stevens agrees, he says: &#34I trust it will fit in well as Standard Life should remain one of the industry leaders given its financial strength and brand awareness.&#34

Identifying the type of client the plans is suitable for, Robinson says: &#34Someone who needs maximum flexibility with a low minimum payment of £40 or somebody who wants the security of a triple A-rated company.&#34 Divers feels that it would be suitable for anyone who has the sense to think about the future and plan for their own retirement, from corporation dustman to chief executives.

Stevens thinks it would be suitable for all who wish to provide some independence for themselves in retirement, he adds: &#34Care needs to be taken when advising older clients without existing pension provision because of the minimum income guarantee. IFAs need to arrange pensions with providers who have the potential to remain in the market, as it is likely that there will only be three or four providers actively marketing pensions in five years time. I hope Standard Life will be one of them.&#34

Turning to the marketing opportunities the plan will provide, Divers says: &#34It&#39s not going to change the world, so on its own it does not provide anything that&#39s not already available. It&#39s more a question of how many IFAs will check it out and put it top of their selling list. That&#39s down to Standard Life&#39s broker consultants.&#34 Andrews thinks it is an addition to Standard Life&#39s already extensive pension range and it should not be looked upon as an alternative to an executive personal pension.

Stevens feels that from a compliance point of view it is important that the IFA can justify recommending a non-stakeholder pension. &#34I was disappointed that justification could not wholly be gleaned from the documents provided,&#34 he says.

Robinson says: &#34I only work on referrals. I have had a lot of interest from male clients looking to buy a personal pension plan for their wives for £3,600. Not the Governments intention I think?&#34

Analysing the main useful features and strong points of the plan, Robinson lists the low minimum investment, flexible payments, the low charges and no transfer penalties. Divers says: &#34It&#39s very up-to-date and has everything that a modern pension plan should have. Its strongest point is the Standard Life name.&#34

Stevens says: &#34Automatic switching to safer funds when nearing retirement, although it does not say when this switching starts, rebate of part of charges for funds of a certain size, the plan can take transfers and it can be used to contract-out of the second state pension. It is for IFAs who are sure of advising this given the complexity of the decision. The open market option is touched on, but not named as such.&#34 Andrews points to the flexibility.

Discussing the range of investment options, Divers says: &#34By comparison with Skandia Life it has nothing like the scope of investments, but in future, IFAs are going to have to give investment performance more attention.&#34 Stevens feels that as the plan includes Fidelity, Gartmore, Newton and Threadneedle this could perhaps provide some justification in part for choosing a non-stakeholder plan.

Andrews says: &#34Taking into account Standard Life&#39s miserable investment performance it is a relief it has included outside fund managers although those chosen could be improved upon.&#34 Robinson thinks the range of investment option is not bad and adds: &#34I never thought I would see Standard Life introduce external fund managers.&#34

Highlighting the plans disadvantages, Robinson thinks it relies on joe-public to make sensible contributions. Divers and Andrews point to the lack of investment choice.

The panel agree that the flexibility offered is good. Divers thinks it is as flexible as a pension should be, but to charge a fee for switching is silly for this day and age and it certainly should not be on a percentage of fund value. Andrews says: &#34The pension contribution insurance contract, waiver of contribution, is a very worthwhile addition. There is a lack of flexibility in fund switching with only one free switch in a 12 month period.&#34

Stevens feels the plan looks every bit as good as stakeholder except for the undisclosed charges. He says: &#34Being able to alter the premiums by telephone is good. The minimum contribution insurance premium is £5 a month, but no indication was given to the cost.&#34

Looking at Standard Life&#39s reputation, Divers feels that they don&#39t come much better. Since it got over its poor administration troubles of the early 90&#39s, it sits pretty near the top of the tree. Robinson thinks its reputation is very good. Stevens agrees, he says: &#34Excellent, if any company deserves to succeed then Standard Life should.&#34 Andrews says: &#34Good, although somewhat tainted by its aggressive anti-demutualisation stance, also somewhat offset by poor investment performance.&#34

Reviewing the company&#39s past performance Robinson feels it is good in the areas of property, with-profits and fixed interest, but mediocre in equity funds in general. Stevens says: &#34Its main strength is with-profits, but the automatic switching and external fund managers help justify the choice.&#34

Divers says: &#34There is not a single fund in Standard Life&#39s pension range that has a credible past performance. But outside of Skandia Life&#39s that&#39s true of them all. This fact alone is what kills it stone dead.&#34

The panel list Skandia Life, Norwich Union, Legal & General and Prudential as providing the main competition to this plan.

Andrews and Robinson feel that the charges and commission payable are fair and reasonable.

Looking at the product literature, Divers thinks that it is fairly bland. &#34It is overburdened with the need to meet regulatory requirements, which have done nothing to assist the public.&#34 Stevens says: &#34Typical Standard Life, okay, but not attention grabbing. The guide says to read the key features document for important facts, one of the most important facts is charges, but these are not shown in the key features document.&#34

Summing up, Stevens says: &#34The authorities demand more transparency so why does Standard Life not give full information. I realise it is the IFA&#39s job to cover these points. But with the recommendation from recent reviews to regulated products, I think it may need to revise its brochures at some point in the near future.&#34

Recommended

Life with L&G

A client of mine wants to invest £35,000 in a low-risk portfolio for income and growth – £7,000 of this will go into a fixed-interest Isa, with the balance into a mix of with-profits and distribution. Who to use? Best to try to use just one investment bond for the with-profits and distribution to get […]

Just a Mortgage deal to become provider to online members club

Introducer Just A Mortgage has signed an agreement with online members&#39 club, Quintessentially, to be its exclusive provider of mortgage services. Quintessentally has chosen Just A Mortgage, part of financial services group Blevins Franks, to arrange and service bespoke mortgages for high net worth individuals. Quintessentially sources a selection of goods and services for its […]

Profits fall at Schroders

Schroders underlying asset management profit has fallen to £46.8 million for the first half of this year from £74.2m for the same period last year. Its pre-tax profit for the six months to June 30 fell to £20.5m from £41.5m last year and revenues dropped to £250.1m from £276.6m in 2001. It attributes this to […]

53% of brokers back no regulation for buy to let

The majority of intermediaries support the Treasury&#39s decision to leave buy to let out of FSA regulations for mortgages, according to research by specialist lender Future Mortgages. But while its survey of 500 brokers shows that 53 per cent agree with the Treasury, a substantial 41 per cent say the sector should be regulated from […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com