Skandia has already announced its adviser charging programme on the Skandia platform, and today announces its plans for the Skandia Life business range.
Skandia is developing its core range of Skandia Life products to be fit for business come R Day. All key products will enable adviser charging, with older products either closing or remaining open for top-up business, but without facilitating adviser charging.
Some key highlights are as follows:
Skandia Life Pension range:
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The core range of Skandia Life pension products will be developed to facilitate adviser charging. New business will continue to be directed through Skandia Life's current personal pension, buyout bond and draw down contract.
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Some earlier pension products will remain open to top-up business and will be developed to facilitate adviser charging.
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The above products account for over 90% of sales and ongoing advice within Skandia Life
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Older Skandia Life pensions (pre April 2001) will continue to accept top-ups but will not facilitate adviser charging. Some older products, representing a small element of Skandia's overall pension book, will cease to accept top-ups.
Maximum Investment Plan:
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The Maximum Investment Plan will close to new business and top-ups. The new rules on qualifying policies introduced in the last budget have now limited the tax advantage of these products. This was a very small market for Skandia.
Skandia Life Bond range:
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The Skandia Life bond range is already closed to new business but will continue to accept top-ups. Skandia will not facilitate adviser charging for top-ups due to low demand and the fact that facilitating the adviser charge will count towards the tax-free 5% withdrawal limit, which may not be in the best interest of customers.
Where Skandia no longer pays initial commission, the customer will benefit from a reduced up front charge or increased allocation rate as Skandia will pass back to the customer the costs no longer incurred by not making the commission payment to the adviser.
The transition to adviser charging will cause minimal disruption to advisers and customers. There is no need for advisers to take any action now, all they need to do is complete the appropriate forms for adviser charging as and when their customer requests a top-up post RDR. In line with the RDR rules, fund switches within a life or pension product will not trigger adviser charging.
Adrian Walker, Skandia's pension expert, comments:
"Advisers now know what to expect from Skandia, whether it's through our platform, or through Skandia Life. We remain committed to our Skandia Life business range, and are ensuring that the products most in demand from our advisers will be fit for business come R Day. We have focused our resources to ensure we meet the expectations of advisers and customers."
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