Skandia has set out which of its products will facilitate adviser charging post-RDR and outlined the older products that will continue to accept top-ups but without adviser charging.
The company says Skandia Life’s core pension range will be developed to facilitate adviser charging. New business will continue to be directed through Skandia Life’s current personal pension, buyout bond and drawdown contract.
Some earlier pension products will accept top-ups and facilitate adviser charging. Older Skandia Life pensions dating from before April 2001 will continue to accept top-ups but will not facilitate adviser charging.
Some older products will stop accepting top-ups. Products that will no longer accept top-ups are pensions from pre-1988, personal contracted out bonds, and executive contracted out bonds.
Skandia says over 90 per cent of its life product sales and ongoing advice will facilitate adviser charging.
The maximum investment plan will close to new business and top-ups, following changes introduced in the Budget in March which placed a £3,600 annual cap on contributions that can be paid into MIPs.
The Skandia Life bond range, which is already closed to new business, will continue to accept top-ups but will not facilitate adviser charging.
Skandia says this is due to low demand and because taking the adviser charge through the product will count towards clients’ 5 per cent tax-free withdrawal limit.
Where Skandia no longer pays initial commission, reduced upfront charges or increased allocation rates will apply.
Skandia pension expert Adrian Walker says: “Advisers now know what to expect from Skandia, whether it is through our platform or through Skandia Life. We remain committed to our Skandia Life business range and are ensuring the products most in demand from our advisers will be fit for business come 31 December.”
Last week Skandia announced its unbundled charging structure, which will see the platform operate a tiered charging structure ranging from 0.5 per cent to 0.15 per cent.
Skandia parent company Old Mutual Wealth Management also announced last week that it is developing a low cost fund range targeted at restricted advisers who want to build their own model portfolio service post RDR. Old Mutual is also planning to launch a range of offshore bonds in the UK, under the Skandia International banner, supported by its new wealth management service Wealth Interactive.
Aurora Financial Planning chartered financial planner Aj Somal says: “The RDR has given providers the opportunity to streamline their product offering and create efficiencies by effectively getting rid of low volume products, allowing them to concentrate on high volume products instead.”