Standard Life’s John Lawson has accused Stewart Ritchie of encouraging churning through his promoting of pension transfers into section 32 contracts.Standard marketing tech-nical manager Lawson says ScotEq pensions development director Ritchie and rivals Scottish Widows are overplay- ing the effect of the A-Day regulatory changes to advisers when recommending switching clients out of executive personal pensions and other occupational money-purchase sch- emes into s32s. Lawson agrees that s32s are suitable for some clients in certain circumstances but says most will be better off remaining in the EPP or, if a transfer is required, carrying out a block transfer into a group scheme or individual product at A-Day. He says this gives the client greater choice, given that new products are regularly being launched, and allows for self-investment, which s32s typically do not. Clients have to sacrifice any tax-free cash rights over 25 per cent if they want to self-invest in future and switch out of s32s post-A-Day so they are effectively locked in until retirement. Standard is instruc-ting its broker consultants to highlight to IFAs Lawson’s condemnation of rivals’ churning. It says the advice mirrors the FSA’s recent warning that it will be closely watching s32 and transfer business. Ritchie says the benefits of switching out of EPPs pre- A-Day are real and significant for a big number of clients although not all of them. He adds that increased res-ponsibilities for trustees of EPPs post-A-Day could lead to many of them closing, meaning enhanced tax-free cash needs to be protected. Lawson says: “Ritchie is banging on about s32s but there is no reason why advisers should close down EPPs and put them into s32s. It is just churning and churning is the cancer killing our industry.” Ritchie says: “I am not advocating s32s are the right answer in all circumstances and I can back up everything I have said or written.” Widows pensions development director Ian Naismith says: “There is a danger of chur-ning but there will be a lot of justifiable transfers into s32s.” Hargreaves Lansdown head of pensions Tom McPhail says: “There is a legitimate case for revisiting client pension arr-angements pre-A-Day but it is hazardous to call for blanket switches out of any product line.”
Scottish Life head of corporate business Mark Polson is not convinced by Vince Whitefoord’s recent suggestion in Money Marketing that pension advisers could face misselling claims if they do not recommend high-net-worth clients to transfer out of defined-benefit schemes
Zurich and Openwork have won their application for an interim injunction against rival Home of Choice, preventing it from recruiting Openwork franchisees until the case is heard. The hearing in the High Court on June 28 was based on a number of allegations including that the defendants were acting in breach of restrictive covenants. Home […]
Iimia has appointed Nicholas Hamilton to its board as an independent non-executive director.Iimia chairman William Long says the appointment is the result of the need for an additional non-executive director following the merger of Exeter and Iimia.
Abbey National has slipped from second to third in terms of mortgage market share, according to the Council of Mortgage Lenders’ annual ranking table of the biggest lenders. Abbey saw its share of gross mortgage lending in the year to April 30 drop to 8.6 per cent from 10.7 per cent over the previous 12 […]
By Denise Wond, marketing manager The buy-to-let market has recently been the subject of a raft of tax changes, all of which make it a less profitable and less appealing proposition for investors. In response, we’ve seen a dip in demand for BTL mortgages and that’s bad news for many advisers who will now be looking […]
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