National Mutual is altering the pricing structure on its single premium contracts to make annual cha...
National Mutual is altering the pricing structure on its single premium contracts to make annual charges and intermediary remuneration explicit to consumers, writes Simon Falush.
The new regime means advisers will either have to take a fee or signal how much commission, in cash terms, is coming from the product. Currently, advisers can report the commission in percentage terms so the consumer does not necessarily know how much goes to the adviser.
Intermediaries will have to stipulate the amount of cash they are to receive from the initial charge and renewals, which will be stated on the contract. The mutual's Sipp contracts already have this system in place.
Ray Chinn, marketing manager of pensions at National Mutual, said: 'We want to tackle the distrust from the public who after the recent mis-selling scandals sometimes think they are being ripped off.'
An exact date for the implementation of the changes has not been set but National Mutual said they would be made by the end of the summer.
Renewal commission will also be made explicit under the changed arrangements so that the cost of ongoing commission will be labelled explicitly rather than being an indistinguishable part of an annual management charge.
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