Skandia has introduced a group personal pension and a group
executive personal pension within its single price pension range that
is designed for fee-based advisers.
The series six group personal pension - single price and series six
group executive personal pension - single price products have no
initial charges and the annual management charge is constructed so
that IFAs can separate the costs of the pension wrapper and the
investment fund links.
The individual pensions in the single price range have flexible
commission arrangements but the group pensions provide payment
for independent advice on a fee basis only. Advisers and their clients
can choose from a fees menu that includes initial fees based on a
percentage of contributions or a monetary amount, a fund-based fee
and a servicing fee. As no commission is payable, the annual
management charge is 0.5 per cent but this does not include the
underlying fund links. The management charge for each fund is up to
0.9 per cent, depending on how actively the fund is managed.
The pensions are available to groups of at least 10 members. For the
GPP, he minimum contribution is £10,000 per scheme a month or an
average of £150 per member a month. The group EPP is pitched at
higher level employees so its minimum contribution is £15,000 per
scheme a month or an average of £200 per member a month.
Skandia has not ditched its initial charge pensions in favour of the
single charge version as the revised depolarisation proposals allow
IFAs to be paid by fees and commission. However, the squeeze on
profit margins since the introduction of stakeholder has made it
difficult for commission-based advisers to provide ongoing pension
advice and the market could be driven further towards fees by new
products such as Skandia's.