Pension provider NPI is the first life office to base external fund
managers' charges on performance.
The company believes one way IFAs can fight back in the post-stakeholder
market is to offer external fund management links on its pensions. It is
also making the fund links open to all its new and existing customers.
NPI says it whittled its choice of fund managers down from 40 to 10 and,
after a further vigorous selection pro^_cess, came up with the final six of
Baring, Henderson, Newton, Perpetual, Schroder and SG Asset Management.
If the external fund underperforms and achieves fourth quartile, the
manager will get only a 0.25 per cent annual management charge. If the fund
outperforms, reaching first quartile, the manager gets 0.75 per cent.
Fund managers reaching second and third quartiles will get 0.5 per cent
and 0.4 per cent AMC respectively.
NPI director of marketing Stephen Ingledew says: “We have learned from the
Aust^_ralian experience that small and medium-sized IFAs are not in the
market for the big trade unions and affinity markets but for
higher-net-worth individuals. The reason is they can offer added value
through the investment range and choice.”
Meanwhile, IFAs are being warned by Clerical Medical
not to become
obsessed with stakeholder. The company says extensive stakeholder publicity
and promotional programmes put out by the Government and product providers
are blinding IFAs to the opportunities on offer in the broa^_der pension
Clerical says independent advisers should treat stakeholder as an
additional product to add to the pension range of products and warns that
concerns over stakeholder
are leading IFAs to question whether they
should be in
Corporate affairs manager Tony Bloomer says: “That is the wrong question.
Stakeholder is simply a product variant – it is not a market.
“Demand for sophisticated value-added products has not died away. IFAs
must keep the whole market in view otherwise they will lose out.”