The majority of advisers are still charging clients an initial charge of three per cent and then 0.5 per cent for ongoing advice with some taking up to a combined 7.5 per cent for pension cases, data from reporting system Selectapension has revealed.
Data from Selectapension revealed that between 2 January to 22 August 2013, 35 per cent of 40,000 cases are charged 3 per cent for a single premium and 37 per cent are charged 0.5 per cent for ongoing advice.
The data revealed that 15 per cent of cases are charged 3 per cent plus 0.5 per cent which is down slightly from the 17 per cent reported at the end of May, when 40 per cent of cases were charged 3 per cent for a single premium and 43 per cent were charged 0.5 per cent for ongoing advice.
The latest figures seem to contradict news last week wherein a survey from Action Consulting of 79 firms showed that initial charges have fallen but ongoing costs have risen. The survey revealed the average initial fee charged for a £100,000 portfolio is now 2.4 per cent, while the average ongoing fee for a £100,000 portfolio is 0.82 per cent.
The new data also showed that 30 per cent of cases were charged over 0.5 per cent at the end of May and this has decreased to 26 per cent at 22 August 2013.
Perhaps surprisingly, the number of cases where advisers were charging clients a combined 7.5 per cent represented around 400 out of 40,000 cases in the new research.
Peter Bradshaw, national accounts director at Selectapension, told FTAdviser that 57 per cent of advisers were taking remuneration from the product, out of 88,000 cases.
He said: “The data show that taking 3 per cent plus 0.5 per cent is still the most common. I think it’s bottoming out. When people look at their business model they have to work out the ability to pay and there is a greater adoption of technology.”
