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Tory peer warns ‘illogical’ consultancy charging ban is ‘killing’ group pensions

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Conservative peer Lord Howard Flight has written to pensions minister Steve Webb warning the ban on consultancy charging is “illogical” and could “kill” group personal pension plans.

Webb banned consultancy charging on auto-enrolment schemes in May after calls from the department for work and pensions select committee, consumer body Which? and the Trade Unions Congress.

Former shadow Treasury financial secretary Flight says the ban has called on the Government to rethink its decision.

He says: “The DWP has gone completely over the top on its rules on consultancy charging. It is completely killing group personal pension schemes. It is wrong.”

Affluent Financial Planning director Carl Melvin says: “The greater good is to get more people saving for retirement and if consultancy charging helps then it is worth it. The Government needs to think less about price and more about value.”

But Corporate Benefits Consulting director Allan Maxwell says: “It would be a huge step backwards to reverse a ban on consultancy charging now.

“It is not fair on members with small pots as these charges can take huge amounts out of the pots.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. So is adviser charging billed to the employer VAT-able or not?

  2. Killing, shouldn’t that be past tense?

    AVIVA have already pulled all consultancy charging for schemes. We were charging £50 per member to cover administration such as illustrations etc so that staff would be informed and we were retained if they needed future advice by staff.

    We’ve written to the employer to ask how they want to retain their services. From their past responses I feel their answer will be ‘we won’t pay for it they just won’t get any information’.

    It was never going to make us Millions Mr Webb!

  3. Julian Stevens 28th June 2013 at 9:27 am

    I foresee more and more intermediaries simply saying To hell with this for a game of soldiers and concentrating on other areas of business. AE GPP’s are just an extension of stakeholder pensions but ten times worse, not to mention the government’s total lack of action to sort out the tangled and restrictive mess of the whole pensions framework which the Conservative party promised in its pre-election manifesto that it would sort out once and for all.

    I decided right from the start that I want nothing to do with AE GPP’s and everything that’s been done since has only reinforced my aversion to the whole sorry business. For Steve Webb to claim that employers don’t need advice on or assistance with setting up and running such schemes shows just how incredibly out of touch with reality he is. And the fact that he refuses to say anything about crucial issues such as the annuity rates trap at retirement just goes to show that in reality he’s nothing more than the Treasury’s glove puppet. No, no, you mustn’t talk about that and, if you do, you’ll be the ex-pensions minister before you can say This is a crock.

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