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Standard Life could ban adviser charging for workplace pensions

Standard Life has warned it could ban the use of adviser charging within workplace pension schemes after the provider moved to restrict use of the charging mechanism for auto-enrolment.

In an update published on its website today, Standard says it will no longer support adviser charging at scheme set up, where the charge is in relation to regular premiums, as a regular ongoing charge or where there is a direct advice offer proposition.

The provider will continue to facilitate adviser charging only where the charge has been individually agreed between the employee and the adviser.

This includes advice in relation to single premiums and individual transfers.

Standard Life says its new, tougher stance on the charging method follows discussions with the Financial Conduct Authority.

It says: “The retail distribution review’s ban on commission, the subsequent consultancy charging ban and the Department for Work and Pensions’ current consultation on legacy commission arrangements, are driving how advisers are remunerated.

“Based on these changes, and discussions with the regulator, it is clear to us they do not expect to see widespread use of adviser charging to enrol members into workplace pension schemes, for example employees should not necessarily need a personal recommendation or advice to join.

“We believe adviser charging is a useful tool however for most schemes, even where there are transfers, we anticipate that advice is only required in limited circumstances, for example those with more complex pension arrangements or with a lifetime allowance protection in place. We anticipate that this will typically affect a limited number of people.

“In the event that advisers are seen to be using adviser charging as a replacement for consultancy charging, we will take action to restrict or even ban the use of adviser charging within workplace schemes.

“Likewise, based on our recent experience with the Department for Work and Pensions and the regulators we would expect them to take similar action in the wider market if they believe adviser charging is being abused.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Quietly resigned 3rd March 2014 at 1:57 pm

    The death by a thousand cuts panto continues. Wouldn’t it be easier if the FCA and the providers just agreed to ban financial advisers entirely and we could all move on to do something more interesting.

  2. Incompetent Regulators 3rd March 2014 at 2:30 pm

    Agree with the above post. Why doesn’t the FCA do the work of advising as well as they are so good at it………………..!

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