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Zurich sets out RDR adviser charging plans

Zurich building 480

Zurich has announced its RDR proposition which will see adviser charging facilitated through its platform and the closure of some of its off-platform products.

Zurich’s retail platform is powered by FNZ and was soft-launched to 16 adviser businesses last month.

Post RDR the insurer will facilitate adviser charging across its platform products including its cash Isa, stocks and shares Isa, its investment account for unwrapped assets, and its retirement account for Sipp assets and drawdown.

Zurich is replacing its existing sterling investment bond with a new RDR-compliant sterling investment bond. It will be available from 1 January and will not support adviser charging. Withdrawals taken from the bond to meet adviser charges will count towards a client’s annual 5 per cent tax-deferred withdrawals. The standard, no exit penalty and high allocation versions of the sterling investment bond will close to new business on 31 December.

The international portfolio bond will remain open to new business, but will also not support adviser charging.

In addition to the existing sterling investment bond, off-platform products that will close to new business at the end of the year are the Zurich Sipp, the Zurich trustee investment plan, and the sterling Isa and the sterling investment account.

In line with the FSA’s policy statement in February, Zurich will accept top-ups on existing business. But it will not pay commission on top-ups where advice is given. Where no advice is given, commission is payable on top-ups.

Trail commission will continue on the original investment amount for the sterling investment bond, the Zurich Sipp and single premium sterling Isa and sterling investment account. But Zurich says if there is or has been a regular payment into the Isa or SIA any advised increase will lead to all trail commission stopping, as it cannot allocate trail payments between existing and increased payments.

Zurich will pay commission on new plans beyond 31 December where there is an illustration and application dated before this date, and where application and monies are received by 15 January.

For the Zurich Sipp where the business involves a transfer from the ceding scheme, there will be an extension until 29 March. Online applications will close at midnight on 30 December.

Zurich head of wealth propositions Adrian Nash says: “We fully support the aims of the RDR and believe increased levels of professionalism and transparency around charging will bring real benefits for customers, advisers and the industry as a whole.

“At the same time, we recognise that as an industry, we are facing a period of unprecedented change. With this in mind, we have developed our intermediary platform to enable advisers to continue to meet evolving customer needs whilst helping advisers transition their business to a post RDR world.”

Following the FSA’s concerns about the way adviser charging is being disclosed to clients, revealed by Money Marketing yesterday, a spokeswoman for Zurich says the firm has measures in place to ensure all charges are disclosed and validated. She says: “If a transaction is received via an adviser or there is evidence that an adviser has been involved, we will assume the transaction has been ‘advised’ and not pay the commission.  We will also contact the customer and the adviser to the validate that our assumptions are correct.”

Facts & Figures Financial Planners managing director Simon Webster says: “If providers do not have a sensible RDR proposition in place advisers will just go to a provider that does. It will all come down to ease of use and strength of service. Zurich has a lot of money invested in advisers, and it will be interesting to see whether its tied advisers struggle in the new world.”

Click here for a guide to Zurich’s RDR adviser charging plans


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

  1. Two observations:

    1) the Zurich tied advisers will be disappointed about the removal of the high allocation rate Investment Bond – it’s rare that I come across one established by one of their advisers that isn’t on this basis (apparently Zurich “give you money” when you invest with them!)

    2) I wonder how many of their tied advisers will (allegedly) not advise clients to top up existing contracts so that they receive commission.

  2. Hello!

    This is all so Stakeholder, so P45.

    Skandia: “We fully support the aims of the RDR and believe increased levels of professionalism and transparency around charging will bring real benefits for customers, advisers and the industry as a whole.

    No it won’t.

    RDR was designed by failed civil servants. It won’t bring any benefit except to the idiots that dreamed it up! And only then for as long as they can persuade their paymasters that they’ve done a good job.

    Now, how long after January 1st will it be before the whole sordid plan unravels? Let’s see now…. How long did it take after Stakeholder before the P45s were handed out?

    A year? Maybe two?

    But the brown RDR goop is going to hit the air conditioning a lot quicker than that because there’s more of it and every client and every adviser is going to have a bucket load of RDR gooey stuff on their desk on New Year’s Day.

    When Skandia sees their new business drop by 50% for the first six months of 2013 they’ll start talking some sense. And that will be just the time the P45s are handed out.

    Failed Civil Servants 1 : Skandia 0

    Do I hear an ‘Oh ballacks!’ from someone in Southampton?

    Love and kisses

    Larrykins xxxx

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