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Standard Life to switch off trail on selected legacy products

Standard Life 480

Standard Life has confirmed it will switch off trail payments on 12 of its legacy products when clients carry out certain non-advised transactions on their investments.

Standard will switch off trail if a client increases or restarts regular payments, adds or changes their indexation or makes ad hoc payments to a policy.

Standard says the products affected represent less than 5 per cent of its commission book. It says allowing trail to continue on these products would be “prohibitively expensive and complex”.

The policies affected by the move are the Personal Pension Plan, Personal Pension One, Personal Pension Flex, Flexible Pension Plan, Individual Stakeholder Pension, Section 32, Individual Buy Out Plan, Pension Fund Withdrawal Plan, Executive Pension Plan, Small Self-administered Scheme, Section 226 and the Free Standing Additional Voluntary Contributions.

Standard says these products have not been actively promoted for at least 10 years.

Standard Life head of RDR proposition and implementation Ross Easton says: “Because implementing the legacy rules in full across all our products and systems would have been prohibitively expensive and complex, in a very narrow number of circumstances we are switching off trail commission where a transaction is carried out by a customer.

“The most common transactions carried out by customers on our life and pension products, such as switching funds, do not result in trail commission being switched off.”


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There are 23 comments at the moment, we would love to hear your opinion too.

  1. I have some sympathy here for the costs of upgrading systems. My concern is that it is not made clear to clients that Standard will simply trouser the cash/commission if they increase payments etc. There is no benefit to client and the adviser is not made aware of the change until it is done. This amounts to a very nice windfall for SL. Do not trust them with yours or your clients money. You have been warned.

  2. Jolly Green Giant 4th March 2013 at 6:00 pm

    Buy shares in Std Life coz their profits will start rising. Unlikely they’ll reduce the ongoing charge to the clients pension pot if the trails gets switched off, so it will end up in their pocket. More profits for the shareholder and no advantage to the policyholder. Another RDR cock up!!

  3. Like everyone else who buys a client base, Standard Life should offer some form of payment for doing this as they are renaging on their terms of business. Like the other post says this is downright theft.

  4. That is Standard Life with a bnkack mark compared to an otherwise equivalent provider going forward and ANY new client joining an IFA who is new ton them will be legitimately rebrkked AWAY fro any existing Std Life contract as better terms can be obtained elsewhere for the client and why on earth do it with Std Life who have stitched the clkient up while using RDR as the excuse.
    SLOC approached the same issue fairly and paid a lump sum to “buy out” ongoing trail at between 2 and 4 x the annual figure. That was fair to advusers and then relied on the adviser applying TCF in return.
    Std Life, disgraceful, but does not surprise me in the least.

  5. I for one will never give them any future business. In time, other IFA’s will do the same.
    This is nothing less than GREED and the FSA have endorsed it. I guess we know where ex-FSA employees will be applying.

  6. “prohibitively expensive and complex”.

    Why – it wasnt in the past.

    Another example of provider using RDR to fill their boots.

  7. Hey Guys.. its just because they wish to guide business on to their wrap. Lets all appraise our standard Life policies as they would encourage us to with other Insurance Companies, on our client’s behalf and where appropriate transfer it to Wrap! Just not theirs!!!!

    Vote with your feet! it’s the only thing they understand!

  8. So the aims of FSA and RDR are?

    I must have missed the bit where it said provide a framework for firms to renege on contracts and stitch up policyholders with the regulators blessing.

    But it doesn’t matter because its only 5%, then the next 10% and then 20% and when the client messes up the qualifying status of a policy no doubt the FOS will uphold a complaint against the advisor for not telling them!

  9. They could of course take the opposite view which is to assume the action is non-advised unless there is evidence to the contrary.

    This does look cynical even if it isn’t but I know that an increasing number of IFAs are becoming increasingly suspicious of Standard Life’s motives.

    As has been mentioned, there is no client advantage in this move simply a windfall for Standard. I have always respect Standard whereas others have not as evidenced by previous comments.

    This is not their finest hour in my opinion and does lend more support for the conspiracy theorists.

  10. (Not Steve above ;-)) Some of the practices are standard RDR, so no news there, just a bit of sensational reporting maybe. However, as this is the first that we have heard of it as IFAs’, you have to say that it may be construed as divisive and there are certainly aspects which appear unnecessary.
    Another black mark in the book of those that do not appear to respect longer-term relationships. Maybe the industry actually wants advisers to move all client funds around and stick them into platforms and the like. For my part, I would prefer a principle of ‘if it ain’t broke, don’t fix it.’ Not easy though, when your income stream is threatened; after all, we have to make a living for ourselves and lest they forget, those involved around us, who have no hesitation in demanding their ever-increasing share of our corn!

  11. They say “Standard says the products affected represent less than 5 per cent of its commission book”

    Before theyAre they confusing Advisor charge under Wrap with commission?

    As someone who has struggled to use their Wrap and fed up with their ‘work arounds’ to deal with system issues- I have work rounds on the work rounds- it shows that their Wrap is not working well.

  12. Becoming a headcase IFA 5th March 2013 at 9:05 am

    Re: Duncan Carter

    Certainly not their finest hour, Duncan, as you say, but not their worst hour either in my personal opinion. You should have seen a couple of the strokes they have pulled with my clients in the past 6 or 7 years and another just the other week.

    I think they will pay for this in the future because a lot of IFAs will never use them again. I never thought I would see what I feel is outright sharp practice from such a major company. Trust them at your peril.

  13. Why is it that IFAs appear always to be the only ones left sucking the hind teat when the unforeseen consequences of RDR emerge at” the coal face” of personal financial services?

  14. Don’t worry chaps ! the profits will go to the otherwise abominably performing With Profits, MC80s, MC100s and any other unitized With Profits plans which some poor clients are still hanging onto in a vain attempt to repay their mortgages !!

  15. IFA’s should begin charging broker consultants an hourly rate as it is “prohibitively expensive” to have them come to our offices to “sell” us their wares.
    RDR is certainly having an effect on clients.
    Well done FSA. Well done SL

  16. Rightious Indignation 5th March 2013 at 9:58 am



    You know it makes sense.

    This is not the first time SL have tried to shaft the IFA community.

    Once is happenstance, twice is coincidence, three times is enemy action.

  17. This is exactly why I dont think anyone in the right mind should tie up with Standard Life WRAP. SL can do as they please!!!!

  18. Bob the builder 5th March 2013 at 1:44 pm

    “IFA’s should begin charging broker consultants an hourly rate as it is “prohibitively expensive” to have them come to our offices to “sell” us their wares”

    well, one might argue broker consultants should also start charging IFA’s for their time, for the CPD, for training, and backdate all the coffees, rounds of golf, dinners, etc. etc. how would that feel?

  19. Anon @1.44
    I have never had a coffee, a round of golf, a dinner,etc etc from any broker consultant.
    I pay for my own CPD and any “training” is usually for the consultants benefit.

  20. “Standard says the products affected represent less than 5 per cent of its commission book.” – And the theft this imp[lies will result in our placing no further business with them, representing 100% of our book!

    “It says allowing trail to continue on these products would be “prohibitively expensive and complex”.” – No it wouldn’t; someone actually has to switch off commission, whereas the system is (or should be) already in place to pay commission.

    Badly done SL – again!!

  21. Standard Life are jokes. They gave up running their passive funds and gave the job to Vanguard. The press statement read along the lines of:

    “there will be no changes to our charging structure”

    Which is a shame really, since the Vanguard passive fund range is much cheaper than Standard Life were offering.

    Pocketing the difference… Easy Money!

  22. Very worrying. Legacy customers still need looking after. The message is very clear. Sorry buy i’m switching off future contributions to Standard Life.

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