The pricing structure of its new unit-linked bond wrapper, the Prudential Investment Plan, gives investors access to 63 funds managed by Prudential and other UK investment companies.
Pru says with PIP, advisers have the flexibility to charge clients an up-front fee, trail commission or a combination of both for their services and also offers the flexibility to reduce annual management charges and adviser remuneration for large investors.
Prudential investment head of business development Frank Morton says: “We have developed a product wrapper in response to growing demand for a more transparent fee structure. As an industry, we need to move to a viable approach to remuneration and one that delivers a clearer understanding of the costs of financial products and advice. In our view, the current model is not economically sustainable.”
Morton concedes he doesn’t expect all advisers to embrace factory-gate pricing overnight.
He says: “It will be a gradual process but the reality is that the commission environment is changing. Depending on their circumstances, different advisers will be better placed to make the change sooner than others and we are committed to helping them do this through the support we provide.”