Press release
AEGON Scottish Equitable enhances Group Personal Pension with launch of flexible charging options
7 March 2007- More flexibility for advisers and employers with the addition of four new charge shapes
- Flexibility to tailor charges to level of advice required
AEGON Scottish Equitable is adding more flexibility to its Group Personal Pension product (GPP) with the addition of four alternative charging options to suit different adviser business models. Available from 12 March, the new charge shapes give advisers and their clients more flexibility in determining the level of advice required and how it is paid for.
AEGON believes commission levels on mono-charged products do not always allow advisers to offer employers and employees the breadth of services and advice they are looking for and there is a demand for products that can factor these into the charging structure.
AEGON will offer a no commission option for advisers working on a fee basis and three new options designed to allow advisers to cater for the needs of clients who want additional services or greater levels of advice and support. These will operate alongside the existing mono-charged shape. At the employer’s request, advisers will have more scope to provide support and advice for individual scheme members at joining to promote scheme take up and ongoing services for both employer and employees.
In AEGON’s recent IFA Insights survey 72% of advisers said they would be better able to adapt to client needs if providers offered more transparent product pricing and flexible commission structures.
To encourage more saving an Active Member Discount will be offered to employees who pay regular contributions. An Annual Management Charge discount of between 0.25% and 0.75% will be given depending on the charge shape chosen. Employees can still benefit from the discount after leaving the employer scheme if contributions continue to be paid.
Alison Nelson, head of group marketing, said:
“It is challenging for advisers to provide workplace advice, support and marketing within the current 1% world and this move brings greater flexibility to do so. We believe that if advisers and employers want to provide extra services or more advice to employees they should have the option to pay for it either as a fee or through scheme charges.
“Our new suite of flexible options supports the need for individual advice within a group setting, which in turn supports the Government’s agenda to use the workplace to boost retirement saving.”
-Ends-
Notes to editors
Regular contribution terms - these are purely indicative charges and the adviser has the flexibility to reduce the charge dependent on the client needs.
| Shape | Description | Indicative Charges 1 |
|---|---|---|
| 1 | Nil commission – Active Member Discount (AMD) | AMC of 0.75% discounted by 0.35% (ie AMD) |
| 2 | Fee replacement – Active Member Discount | An initial charge equal to the fee replacement commission paid + AMC of 1%* discounted by 0.25% (ie AMD) * assumes level commission paid in addition to the fee replacement commission |
| 3 | Indemnity commission – Active Member Discount | AMC of 1.5% discounted by 0.5% (ie AMD) |
| 4 | Indemnity commission – Initial charge and Active Member Discount | 5% initial charge for 5 years + AMC of 1.5% discounted by 0.75% (ie AMD) |
1 Actual charge levels will be subject to scheme financial underwriting
- The additional charge options are available on GPP only. Group Stakeholder and Group SIPP products will not have access to these new terms at present.
- AEGON has assets under administration of £45.2 billion and employs around 4,000 staff. AEGON is part of the AEGON Group, which is one of the world’s largest listed insurers and has assets around Euro 359bn (£250 billion).
Jonathan Atkins