A “small number” of advisers have asked M&G Prudential to breach its adviser fee limit, Money Marketing has learned.
Earlier this year, the company introduced a cap on initial adviser charges of a maximum 5 per cent or £20,000, whichever is lowest, and 1 per cent for ongoing fees.
While the firm did not disclose exact numbers, some three months after the new charging structure came into effect, a Prudential spokeswoman has confirmed to Money Marketing that some advisers had applied to breach the limits, and that higher charges in some complex cases had been approved by the firm.
The spokeswoman says: “We have received a small number of applications in which [fees] have exceeded our limits, a reasonable percentage of which we have accepted as we believe it is justified because of the additional work the adviser has needed to undertake.”
When the company introduced the change in fee structure, it asked advisers with a case where the charging level could exceed these limits to provide additional information around the background of the case and/or client before submitting their application.
It said this would be used to review whether to approve exceeding the level of adviser charges.
|Type of charge||Proposed limit
(At plan/product level)
|Initial charge %||5%||the lower of|
|Initial charge £||£20k|
|Initial charge – regular premium||5% of premium or 25% of first 12 monthly premiums|
|Ongoing charge %||1%||of the fund value|
|Ad hoc charge £||2% of fund value in a 12 month period|
The spokeswoman adds: “We look at each application on a case by case basis and, generally, we have found that advisers have been supportive of our stance.”