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PRODUCT MATTERS

With the relaunch of its existing personal pension plan, Skandia has cast itself as the IFAs&#39 champion. Cheerfully sticking two fingers up at the Government agenda,it has come up with a pension package which offers a real alternative.

The charges have been tweaked at the edges, with the removal of the policy fee and the encashment penalties for single premiums. Even so, the charges are enough to make a back-street lender feel like a philanthropist.

Pile into a few of the higher-cost funds, throw in some fund-based commission, and you could be looking at a reduction in yield of over 3 per cent – stakeholder-friendly it isn&#39t.

But this isn&#39t really the point, according to Skandia. IFAs provide a high-quality service to affluent consumers. The multipension offers the opportunity to create a made-to-measure, high-quality pension which transcends awkward questions on charges and commission levels. Online facilities have been added to include fund switching, contribution redirection and valuations.

If Isa experience is anything to go by, with a relatively small proportion in Catmarked funds, it is reasonable to suppose Skandia, and IFAs, have a viable market to go for.

The biggest threat to Skandia&#39s bold move is likely to come from the development of pension supermarkets.

The 0.75 per cent charged by Skandia from the personal pension charges does look brutally expensive when compared with online costs. While it deserves credit for showing IFAs the way forward,it may find it is not immune to the pressures of a cost-competitive environment.

Thomas McPhail is pensions development manager at Torquil Clark

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