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Scottish Life U-turns on consultancy charging

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Scottish Life managing director Ewan Smith

Scottish Life has U-turned on its decision to continue to process new business on a consultancy charging basis.

Last month, the Government announced plans to ban consultancy charging for all auto-enrolment pension schemes.

Last week, Scottish Life said it will continue to offer consultancy charging, where fees for advice are deducted from employees’ pension pots, ahead of firms’ auto-enrolment staging dates for pipeline schemes and new business.

The provider’s stance was publicly criticised by pensions minister Steve Webb.

Scottish Life managing director Ewan Smith says the provider has now decided not to write new consultancy charging business.

He says: “We have been working with advisers and employers for many months as the market anticipates the challenges that auto enrolment will bring. 

“Many employers are keen to ensure that members benefit as early as possible and are putting schemes in place well ahead of the staging date that has been allocated to them.

“For some of these schemes advisers will have negotiated their remuneration on a CC basis.

“We will continue to manage these through this transitional period, and once complete we will not accept CC agreements as the industry moves to a fee based model.”

A Scottish Life spokeswoman says: “We would expect advisers meeting with new employers not to use consultancy charging from now on.”

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Simon Webster 7th June 2013 at 3:47 pm

    SL are to be commended for their attempt to buck the trend but there is a limit to how long any of can swim against the political tide…

  2. Might as well have a dictatorship 7th June 2013 at 4:08 pm

    This makes me furious but not for the reasons of CC. I think its fairly obvious that you shouldnt have CC on compulsory schemes. The problem here is principle. A decent provider operating within the current regulatory rules and the current law has been “pressured” to change its commercial stance against its own preferences. What tactics or pressures were used? Who said what? What might be next?
    You have to run a country within a structure, a framework of systems, rules and laws and if the Govt cant achieve what it wants using the system then it should quit and let somone more competent take over rather than having to resort to “pressure” – its a slippery path that can lead to dark places society wouldnt want to go

  3. I don’t think they have changed their stance at all, unless I have misread the article.

    I cannot see any u-turn here and would have been very concerned if there had been. All they are suggesting is that, in effect, they will only accept ‘pipeline’ business (in whatever form that comes..a bit like providers during the first few months of RDR)!

  4. Dick Sprinkler 7th June 2013 at 4:24 pm

    @ Anon 4.08pm

    Regulatory/Government interference, RDR, MMR AND this are against commercial and market principles – nothing new there.

    Yes you are absolutely correct it leads to a dark place !

  5. Plus ca change... 7th June 2013 at 4:32 pm

    @ Steve D
    It looks like a change, if you assume they wont now let you provide a CC solution to a NEW client (presumably NEW means one that hasnt already been quoted?) from today, even though it might be some yrs before the date of compulsion for the firm.

  6. Philip Whitworth 10th June 2013 at 9:55 am

    Taking into account all the time we have had to plan and implement auto enrollment wouldn’t you have thought that clarification would have been sought in respect of what charging methods are deemed to be acceptable or not? Couldnt run a p…s up in a brewery!

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