Type: Individual personal pension
Minimum premium: Lump sum £1,000, monthly £100
Minimum-maximum ages: From birth-75
Fund links: Choice of 20 Friends Provident funds, seven multimanager funds from Friends Provident and F&C, 33 externally managed funds from ABN Amro, Artemis, Baillie Gifford, Fidelity, First State, Gartmore, HSBC, Investec, Invesco Perpetual, Lazard, Merrill Lynch New Star, Newton, Schroders and UBS, cautious, balanced and speculative lifestyle investment programmes
Options: Transfer value account, protected rights account, pension credit account, pension for children option
Allocation rate: 100%
Charges: Annual up to 1.5% in first 10 years, thereafter 1%, annual 0.2-0.9% for externally managed and multi-manager funds
Commission: Initial up to 10% of Lautro rates, initial up to 10% of Lautro rates plus 0.1% fund-based renewal, fund-based renewal only up to 4% a year, additional fund-based renewal in first 10 years up to 0.5%
Tel: 0845 7573 036
This individual personal pension is part of Friends Provident’s new personal range.
Informed Choice director Martin Bamford thinks the product offers a comprehensive range of funds. He says: “The large fund annual management charge discount will make this product more attractive for investors who have larger pension funds and are making larger contributions. This product will also appeal to investors who have socially responsible investment criteria, as F&C will be applying its responsible engagement overlay to a number of the equity funds on offer.”
Bamford regards Friends Provident’s e-commerce platform as one of the best available in the market. “I feel that the use of this e-commerce platform will be one of the main reasons for recommending this particular personal pension over and above the competition,” he says.
On the downside, Bamford complains that the minimum monthly contribution level is high at £100. He explains: “Many pension providers are trying to discourage lower value business, which will alienate many IFAs and their clients. I often have younger clients who are starting to build pension benefits and £100 a month is too high for their requirements.”
He is sure that Friends Provident could have designed an efficient processing system, possibly using their e-commerce platform, which would have permitted a lower minimum contribution level.
Looking at the likely competition Bamford says: “The main providers will provide healthy competition for Friends Provident. It is still possible to get access to a reasonable range of funds for a much lower set of charges than Friends Provident has to offer.”
Bamford also thinks self-invested personal pensions such as Standard Life’s will provide competition. He concludes: “The way that different pension accounts will be used for different types of contributions could make this product confusing for the consumer. It will also make carrying out an annual review of the pension policies more time consuming for the IFA.”
Suitability to market: Average
Adviser remuneration: Average