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 this week, Standard said 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.
Adviser charging will continue to be facilitated 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: “It is clear to us the regulator does not expect to see widespread use of adviser charging to enrol members into workplace pension schemes.
“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.”
But Aegon regulatory strategy director Steven Cameron says: “We think there is a role for adviser charging in GPPs for people who want personalised advice and want to pay for it out of the pension.”
Aviva will only facilitate adviser charging where there is an explicit agreement between the member and the adviser while Legal & General does not support adviser charging for new workplace pension schemes.
Syndaxi Chartered Financial Planners managing director Robert Reid says: “If adviser charging is being used to work around the consultancy charging ban then that will be a concern for the regulator and the DWP.”