Scottish Life has designed a range of individual pensions that will eventually replace its existing individual Talisman products.
The company improved its group pension offerings 18 months ago and is now keen to implement similar changes to its individual range, which includes a personal pension.
This personal pension has different charging and commission structures to the Talisman personal pension, which has a bid/offer spread of 5 per cent and an annual management charge of 1 per cent. The new personal pension is a single-charge contract, with an annual charge of between 0.4 per cent and 1 per cent.
However, charges may go above 1 per cent due to the flexible commission options available to IFAs. For single premiums, initial commission is payable up to 3.5 per cent with fund-based renewal up to 0.35 per cent. Regular premiums have more flexibility, with, initial level and renewal options available. The existing Talisman pension has some flexibility but is based on a percentage of Lautro.
The individual personal pension also has greater investment choice than the Talisman product as it provides access to four multi-manager funds from Escher and a range of capital-protected funds from Scottish Life International.
The features of the new pension are characteristic of the post-Sandler 1 per cent world but the option to go beyond 1 per cent takes into account that independent financial advice may not be covered within this figure.
Scottish Life says the inclusion of multi-manager funds is a response to Sandler's concern about a lack of specialist investment knowledge among IFAs. By delegating fund selection to Escher, Scottish Life believes it is making life easier for IFAs.
IFAs may be unable to do this type of portfolio construction for pension clients themselves, especially as commission levels have been driven downwards since the introduction of stakeholder.