View more on these topics

Royal London slams “unsustainable commission” on group pensions

Royal London has blamed “unsustainable commission” rates being paid by its rivals on group pensions business for distorting the market, after group pensions new business at Scottish Life dropped 19 per cent.

In its new business results, published today, Royal London blames commission tactics by its competitors for the group pensions market remaining tough.

Scottish Life saw the present value of new business premiums on group pensions fall 19 per cent from £422m in 2008 to £342m in 2009.

It says: “The group pensions market continues to be difficult and there are still serious issues with unsustainable commission rates being paid by some companies, which distort the current market.”

But Royal London expects this to improve in 2010 as the retail distribution review draws closer.

Scottish Life total new business was up 4 per cent on 2008, from £1.52bn to £1.58bn, while individual pensions new business was up 18 per cent from £889m to £1.05bn.

Royal London Asset Management saw new business drop 20 per cent in 2009 from £734m to £589m.

Royal London says the offshore market was also challenging in 2009, with sales down around 40 per cent across the market, although it has not produced new business comparisons, as its international business Royal London 360 was formed at the start of 2009.

The Ascentric wrap saw new assets under administration increase 111 per cent from £199m to £421m.

Bright Grey saw new business down 8 per cent from £181m to £167m.

Royal London group chief executive Mike Yardley says: “These are excellent results overall, in what has been a very difficult year for the life and pensions industry. 

“Our expectation is that the majority of companies will be reporting a marked decline in new business levels.”



Misbehavioural finance

We’re all predictably irrational. Evolution gave us a set of reflexes for fast decision making that override our thought processes, largely because these reflexive responses have strong emotive content. These hard-wired psychological biases are something advisers simply must understand if they’re to be able to guide clients to good solutions, because they’re the real source […]

Skandia tool aims to shed light on opaque with-profits

Skandia has launched a withprofits bond analysis tool to help identify penalty-free exit opportunities and compare performance against alternative tax wrappers. The With-Profits Analyser gives advisers an overview of each with-profits fund on the market, with data from Cazalet Consulting, including the asset allocation and annual gross returns of underlying assets. It also details the […]

Henderson is leaning towards tilted trackers

Henderson New Star director of retail business development Stewart Cazier has revealed the firm is considering launching tilted trackers and he expects other fund firms to follow suit. He believes the retail distribution review will prompt investment companies to launch these products as clients will pay a fee for using a platform, meaning there is […]


News and expert analysis straight to your inbox

Sign up


There are 5 comments at the moment, we would love to hear your opinion too.

  1. Hmm – this seems to suggest that IFAs might be swayed by commission when recommending a group scheme provider.

    I find this hard to believe….

  2. ..or that Scot Life pay the Sqr root of nothing in comm. There nil comm AMC is higher the Scot Eq on 4% level comm !!

  3. Given the stringent rules and regulations within the pensions industry would it not be simple to have a standard level payment system for all providers.

  4. They have no room to talk when you consider the sucicidal price they charge for their Individual contract just to undercut everyone else. Is this not buying business in a different guise.

  5. They have a choice. They can put up or shut up.employers have voted with their wallets in recent years and have stopped paying fees in their droves. These guys should be working for the FSA

    Because of firms such as this we will all have to go back to pre Stakeholder structures. Clients will not pay fees.


Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm