View more on these topics

Now ScotAm draws back as it scraps commission

IFAs believe Scottish Amic-able has effectively pulled out of the pension market by ditching initial commission on new regular-premium pension business.

Pru-owned ScotAm says paying initial commission is no longer sustainable within the narrow margins of the post-stakeholder market and believes its rivals are pinning their hopes for future profitability on stakeholder becoming compulsory.

The move follows the withdrawal of Clerical Medical from the group market after its strategy to win high volumes of business backfired, leaving it with an admin crisis. It plans to return to group business early next year.

Pru says it wants to boost its single-premium and transfer business and sales of with-profits bonds and annuities. Initial commission will be phased out as the life office says it switches its attention to long-term profitable business.

While the Pru is positioning the move as working even more closely with advisers in areas of greater profitability, some advisers have given the development a cool reception.

Pentland Financial Planning principal Tony Pentland says: “Providers are dropping like flies. It was obvious this was going to happen even if you are a big player. Prudential have not done themselves any favours. This move muddies the waters for themselves in the IFA channel more generally.”

Roberts Clark director Ashley Clark says: “They have realised it is not profitable to write this business and are walking away. It seems like a strategic decision not to play with the ScotAm brand and will probably market everything through the Pru. They have not been winning the stakeholder war against Norwich Union and Legal & General.”

Prudential Intermediary Business distribution director Tony Kempster says: “Initial commission-based pensions business cannot be sustained in current market conditions. We must adopt a sustainable approach to profitability. My impression is that some of our competitors believe the Gov ernment will make contributions to stakeholder pensions compulsory but this also assumes that the Government will afford providers the luxury of the 1 per cent margin.”


Chelsea Building Society – 2 Year Fixed Rate Bond (10th issue)

Wednesday, 22 August 2001.Type: High interest account.Minimum-maximum investment: £1,000-£500,000.Interest rate: 5.65 per cent.Term: Until December 1, 2003.Offer period: Until further notice.Withdrawal penalties: 60 days&#39 loss of interest.Tel: 0800 779087.

Julian Gibbs

Eurolife has produced yet another ingenious high-return product called the Bluechip Plus Plan. It pays 10.5 per cent a year, 0.82 per cent a month or 34 per cent growth over three years, tax-free through Isas and Peps. With the stockmarket at current levels, this can be regarded as a lowto medium-risk plan as shares […]

Sandler&#39s claims come as a personal insult

Having read your comprehen-sive coverage of the contentious issue of the Sandler review (Money Marketing, August 9), I feel compelled to add my own contribution to the debate. Far from accepting the findings of the report as little more than a sweeping generalisation of our industry, I find them a gross personal insult. The aspersions […]

The Exchange – Easi Protect Plus Plan

Monday, 20 August 2001.Type: ASU mortgage protection plan.Maximum benefit: Options one & two £2,000, option three £1,000.Benefit payment plan: 12 months.Deferred period: 30 days.Premium: Option one – single premium accident, sickness and unemployment cover £5.50 per £100 monthly benefit, option two – monthly premium accident, sickness and unemployment cover £5.95 per £100 monthly benefit, option […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    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