Clerical Medical is calling for a standard method to apply charges to a stakeholder product as the v...
Clerical Medical is calling for a standard method to apply charges to a stakeholder product as the varying methods are skewing returns and making it difficult to compare fund performance, writes Simon Falush.
With little differentiation between stakeholder funds, performance figures are likely to be a key factor in their purchase.
Nigel Stammers, pensions strategy manager at Clerical Medical, said that currently some providers post returns without taking into account charges at all while others include the maximum charge, making discounts after the returns have been reported.
Those which, for example, assume a 0.25% fee and add on additional charges after reporting the returns may appear to have superior investment performance to a company, which charges 1% and discounts back, Stammers said.
Clerical Medical starts at the maximum and discounts for funds which have lower charges, Stammers said.
He argues that intermediaries looking at best advice surveys, which feature past performance may be misled into thinking that companies with equal charges have different rates.
Paul Stanbridge, head of stakeholder strategy at Friends Provident agreed that the level of charges taken into account when measuring fund performance should be standardised.
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