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True Potential enters auto-enrolment market

True Potential has launched an auto-enrolment proposition charging up to 0.74 per cent.

In March, the company launched ImpulseSave, a facility that allows ad-hoc saving and investment contributions starting at £1. Following FCA approval the platform is now offering a solution for employers setting up schemes for auto-enrolment under True Potential’s group Sipp.

The launch follows growing concern competition at the small end of the auto-enrolment could be constrained as The People’s Pension considers an extra employer charge and Now: Pensions faces criticism over its administration services.

Employers have a choice of default investment funds provided by Legal & General Investment Management, charging between 0.71 and 0.74 per cent. Members also have a choice of 30 funds that exceed the Government’s auto-enrolment 0.75 per cent charge cap.

True Potential is offering advisers a one-off profit share payment, equivalent to £4 for every £1,000 invested, paid once the scheme has been set up for 12 months.

Finance & Technology Research Centre director Ian McKenna says: “What differentiates this proposition from other auto-enrolment suppliers is the way in which scheme members can interact with the service. Each individual member has access to their own information and investments via mobile apps which can operate on a range of devices.”


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There are 8 comments at the moment, we would love to hear your opinion too.

  1. I am interested in the profit share offer, I thought remuneration for advisers was not allowed?? do any other AE solution providers offer this??

  2. Jason, I believe True Potential are rebating their own charge back to the IFA. From what I have seen so far TP look to have set up something very sophisticated and user friendly and they have in place a team to administer and adjust and grow to facilitate requirements.

  3. Given this and other things I see, I feel that there will be further ‘shake downs’ by the FCA/TPR … as implied above, payments to adviser firms from a provider feels like consultancy charging in everything but name.

    We also see ‘middle ware’ providers paying advisers ongoing income streams for selling their products – again, is this not level commission in another form?

    In the AE market I’m also wary that we have the disparity of providers with higher member AMCs (but no employer scheme charge) and other with lower member AMCs (but there is an employer scheme charge) – IMHO there’s a bit of a conflict of interest going on there.

    My opinion is that the regulators are making it perfectly clear how advice should be charged when offering ‘group pension’ advice to members and employers but there are many approaches being taken which are seemingly trying to produce adviser fees either from the employer or the member in a not particularly transparent way.

    I realise this is perhaps controversial but my heart sinks when I read another ‘work around’ wheeze trying to avoid the fact that the regulators seemingly want advisers to charge clients directly based on the advice they receive. I’m certainly not suggesting this is the case with True Potential but I’m all for transparency and clear advice costs.

    One key change I would, however, recommend to the AE providers is to faciliate adviser charging where agreed without restriction – let the consumer decide if and how to pay for advice – even if that’s Nest and other master trust providers.

  4. True Potential as I understand it charge for their AE service package 0.4% per annum of funds collected. That is clearly transparent and all they are offering introducers is a payment equal to their 1st years charge, so what TP earn in the 1st year they are paying to the IFA.

  5. TP are not rebating their charge on an ongoing basis. It’s the first year platform charge that they are paying to advisers, which is not going to amount to much when starting from a zero base. There is no further payment to the adviser, and to date True Potential seem to be resisting giving a no cross sell guarantee. Introduce your clients at your peril

  6. TPR has recently confirmed that advising on and recommending a pension to an employer for AE purposes is not a regulated activity, why therefore does the FCA dictate what remuneration be paid to firm ‘advising’ on this. Many of the new ‘pop up’ firms are not regulated and are recommending pension providers left right and center…

  7. @Jason Brice

    Exactly! Any Tom, Dick or Harry can set up as an AE adviser and tell a client which provider to use for their 100+ employees but to set up an individual pension you have to be regulated. This has always confused me, why allow such a contradiction?

    The reason that middleware providers can continue to pay advisers a monthly payment is exactly that, setting up an AE scheme is not a regulated activity so the people doing in can receive remuneration in any format they like.

    The mind boggles………………………….

  8. Jason, the paper mentioning advice on AE is not a Regulated activity came from a joint FCA / tPR paper.

    The piece about it being non Regulated I view as coming from the FCA. They regulate advisers and if they say that you can’t take commission for an AE scheme, thats pretty much the end of it.

    I’m uncomfortable with the idea of a “profit share”. This looks to be somebody trying to circumvent the FCA ban on commission for AE. I know who will win that argument.

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