The life office says it will be for advisers, and not pension providers to decide how much can be taken out of employee and employer premiums, in negotiation with employers. But providers will compete in the way their systems allow them to handle the shapes of consultancy charges that advisers want to take.
Martin Palmer, head of corporate pensions marketing at Friends Provident says: “Consultancy charging has to be adviser-driven. We have a TCF responsibility and if the charges are stupid, and it does not become worth the member saving, then we will not be able to allow them. But other than that, it is for the adviser and the employer to decide on the level of consultancy charging deductions.
“Providers will compete on being able to match what advisers want from consultancy charges. Some might want fund-based remuneration, others may want level or initial. The pressure on providers will be how do their systems allow them to support that.”