Blair goes into more detail: “There will not be with-profits on the stakeholder version of the plan, so 21 funds on this version and 20 on the stakeholder. I use about seven of these personally. The option to use the likes of Merrill Lynch externally puts them on a more even footing with those who have offered external funds for some time.”
The panel has a difference of opinion when considering the plan's disadvantages.
Ward points to: “The waiver protection set at average of previous three years (not indexed), and a minimum £1,000 single contribution, £500 would have been better.”
Blair continues: “There is uncertainty over ownership of Friends Provident in the future. Its plans to demutualise and to be an independent company as far as possible. It believes that a buyer would be buying to grow Friends Provident not buying to pull it apart. Many smaller offices are going to be targets for the supergroups and in this respect Friends Provident's offering is no different.”
Duchart simply feels that the product's blandness is a disadvantage.
Looking at the flexibility offered by the pension plan, Blair highlights the ability to vary contributions and the daily and weekly collections.
Duchart says: “I see nothing above that which could be expected as a minimum.” Ward comments that it: “Appears flexible.”
Moving on to Friends Provident's reputation, the panel is largely in agreement.
Ward simply says: “Very good.”
Duchart goes further: “Strong reliable mutual – not much use for selling to future investors given decision to demutualise.”
Blair says: “Very good. Their income protection and with-profits products have stood them apart, and I've always looked on them as the smaller of the big players rather than the bigger of the small players. Mutuals and recently ex-mutuals have a strong following among Brits.”
On the subject of Friends Provident's past performance, Duchart says: “The only fund which I feel is notable is Stewardship.”
Blair says that its track record is respectable amongst life offices, picking out the Stewardship, managed and with-profits funds as the most notable.
Ward also think the company's past performance is: “Very good.”
Considering the main competitors for the Friends Provident product, the panel pick up on different companies.
Blair says: “Norwich Union – once they sort out merger teething problems, Clerical Medical – onced they sort out very poor administration, Standard Life – once they get performance back on line. I expect Fidelity will enter the market shortly.”
Ward is more general: “All which emphasise stakeholder friendly and show charging structure up to 1 per cent.”
Duchart highlights: “Any other stakeholder type product – Norwich Union, Legal & General, Scottish Widows, Scottish Equitable.”
Judging whether the charges for the plan are fair and reasonable, the panel is lukewarm.
Ward says: “What you would expect.” Duchart simply says: “Market norm, what else could they do.”
Blair is general: “Stakeholder charges are designed to be more transparent and single charging is easier for clients to understand.”
Analysing the commission, Duchart says it is: “About the norm.”
Blair goes into more depth: “Fair in the current climate compared to the others, but I am already finding myself being forced to charge fees as well.”
Ward has mixed feelings: “Initial charge about the going rate. Fund based, level and renewal rates are reasonable.”
Considering the quality of the product literature, the panel has a difference of opinion.
Duchart says: “Terrible – jumps from issue to issue.”
Ward is more positive: “Description for self-employed contributions will change to net of basic rate from 6 April – this could have been incorporated as new, a reprint is necessary. Literature is clear and set out well, but lots of booklets in pack. Expensive to mail. Application form easy to complete, but the dark colour will make copying and faxing difficult.”