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Skandia brings fee-based pensions to group market

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 &#45 single price and series six

group executive personal pension &#45 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&#39s.

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