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Scottish Life reports continued high use of Adviser Charging
24 June 2009
Scottish Life, the pensions specialist arm of the Royal London Group, has reported continued high demand for its own style of "Adviser Charging" remuneration for IFAs.
Over 90% of new regular premium individual business written by Scottish Life in the past year has been on an Adviser Charging basis.
Keith MacPherson, Head of Marketing Development, said:
"Adviser Charging is one of the cornerstones of the Retail Distribution Review (RDR). However it appears to cause a lot of confusion, with some people saying that customers generally aren't prepared to a pay a fee, so it won't be successful.
"However, the key point to understand is that the customer has the choice of paying a fee or meeting the cost of advice from within their pension plan. Our experience clearly shows that advisers and their clients are perfectly happy to make this choice and to make Adviser Charging work in practice.
"The major difference compared with the traditional commission model is that, with Adviser Charging, the provider has no involvement in setting in the level of remuneration for the IFA.
"Scottish Life has been holding seminars across the UK to help IFAs understand how Adviser Charging works, as well as giving insights as to how advisers can develop their business model to be successful in the RDR environment."
Scottish Life's own style of Adviser Charging (called "Financial Advisers Fee") was introduced in 2003. It is designed to offer advisers and their clients the "best of both worlds" - the transparency of a fee-based approach together with the tax-efficiency (for pension sales) and practicality of both initial and ongoing commission payments from the product. This approach is fairer and clearer to customers as well as providing a sustainable business model for advisers and providers.
- ENDS -
For further information please contact
Scottish Life
Alasdair Buchanan, Head of Communications
0131 456 7133
07919 170 413
Polhill Communications
Sally Biggs
020 7655 0520
Editor's Notes:
Scottish Life was founded in 1881 in Edinburgh as a proprietary company, becoming a mutual company in 1968.
On 1 July 2001, Scottish Life demutualised and transferred its business to The Royal London Mutual Insurance Society Limited. Scottish Life is a division of Royal London and is the specialist pensions business within the Group, providing individual and group pensions to the market via intermediaries.
Scottish Life and Royal London's other intermediary businesses are based mainly in Edinburgh where 1,180 staff are employed, with 720 working in other parts of the UK and overseas.
Royal London Group, is a specialist financial service provider. Its businesses focus on those sectors of the market which value quality propositions, operating through a number of brands:
- Scottish Life - UK pensions market
- Bright Grey - UK protection market
- Scottish Provident - UK protection market
- Royal London 360° - offshore investment markets
- RLAM - fund management
- RLAS - life and pensions administration
- Fundsdirect / Ascentric - funds supermarket; Wrap platform
Royal London also distributes life and pensions products through Abbey's national branch network.
Royal London is the largest mutual life and pensions company in the UK with Group funds under management of £32.5 billion. Group businesses serve around 3.6 million customers and employ 2,870 people. Figures quoted are as at 31 March 2009.