Friday, 23rd March 2001.
New Generation Personal Pension Plan
Type: Individual personal pension plan.
Minimum premium: Lump sum £1,000, monthly £50.
Minimum-maximum ages: 16-75.
Fund links: With-profits fund, managed fund, UK equity fund, stewardship fund, stewardship managed fund, UK index tracking fund, overseas equity fund, North American fund, Pacific basin fund, European fund, annuity protector fund, property fund, fixed interest fund, index linked fund, cash fund, Merrill Lynch UK equity, Merrill Lynch international opportunities, Newton balance, Newton income, Baillie Gifford managed, Baillie Gifford international.
Charges: Annual 1 per cent.
Allocation rates: 100 per cent.
Minimum term: One month.
Commission: Fund based 0.4 per cent, level 3.5 per cent or initial 40 per cent renewal 2.5 per cent.
Tel: 08706 083678.
Bob Ward – Director, BRM Associates
Brian Duchart – Director, Donington Independent Financial Consultancy
Jonathan Blair – Senior IFA, Park Row Associates
Investment options: 8.0
Company's reputation: 6.7
Past performance: 7.0
Product literature: 4.0
Friends Provident has introduced the New Generation personal pension plan. Considering how well the plan fits into the market, Ward says: “It's needed to meet the new charging structure.”
Blair goes into more detail: “The £50 minimum premium is higher than the £20 stakeholder minimum, however this could be a combined employer/employee figure, so not too hard to achieve. This will be reduced to £20 on the stakeholder version of the plan, I understand.”
Duchart says that it looks like a simple, no frills pension that would be suitable for Mr average.
Assessing the type of client the plan is suitable for, Blair says: “Anyone who is eligible to join a personal pension. It could also be used for those looking to make extra pension contributions after April 6 2001.”
Duchart reiterates that it would appeal to: “Mr average, or possibly Mr below average.”
Ward feels that it would be suitable for self-employed or employed clients where contributions are greater than £3,600 a year or no stakeholder is available.
Moving on to the marketing opportunities that the plan will provide, the panel has a difference of opinion.
Ward says: “Most pension providers have now rebranded their products, and Friends Provident's plan is in line with these.”
Blair points to: “Stakeholder publicity and charges will mean some schemes are vulnerable and Friends Provident may see an inflow of funds from smaller or less competitive companies older products. The plan itself offers no more or less opportunities, but the brand is strong.”
Duchart concurs, saying that he sees nothing new or revolutionary in this product.
Picking up the useful features and strong points of the plan, Blair says: “E-commerce opportunities will help the employer and employee alike, and member access is up and running ahead of some others. This ease of access should be a key factor from the employer's point of view, as they already represent a series of collection points for the government now.”
Duchart mentions the external fund links as a strong feature.
Ward, on the other hand points to the lifestyle strategy, saying that it is useful for the automatic approach to normal retirement date.
Turning to the investment options available, the panel has varying degrees of enthusiasm.
Duchart says: “Acceptable for most vanilla flavour personal pension plans.”
Ward is a little more positive: “Good range of funds with external fund managers adding to choice and competing with self invested personal pensions. However, limited to six external fund links – again not shown in literature.”