In the 18 months since ScotLife introduced its fee option – an unbundled charging structure which allows IFAs to tailor remuneration to their work, including the option to move outside the stakeholder 1 per cent cap – over 55 per cent of all individual pension policies sold by the group have used this option.
Group head of communications Alasdair Buchanan says sales of individual pensions at ScotLife grew by 21 per cent in the first half of 2004 and he expects this trend to have been broadly maintained in the second half, boosting the company’s market share.
He says growth has not been driven solely by the fee option but it may give ScotLife an edge when IFAs compare products from different providers.
He believes other life offices will develop similar options but says one of the main obstacles is the systems required to support such a charging structure.
Buchanan also expects ScotLife to have increased its market share in segments of the group market but notes that the competitiveness of the market in 2004 meant sales consultants had to do more work to secure a sale.
However, ScotLife says the aggressiveness of pricing in the group market is easing, with commission levels reverting to more sustainable levels.
Buchanan says: “The menu system can enable IFAs to continue to develop their business successfully and build confidence and trust with their clients. We’re cautiously optimistic and believe rebuilding confidence in the long-term savings market is a priority.”