November has been set as the cut off date for initial commission on corporate pension schemes for advisers, on all new and existing products, Scottish Widows has announced.
Following a “thorough” review, and to comply with deadlines set by the department for work and pensions, the company will remove initial commission in November. In April 2015, it will implement a 75 basis point cap and in April 2016 it will remove all ongoing trail commission payments.
To comply with new government requirements, the mutual has announced changes to “provide clarity for advisers and employers in order to understand the full implications of their corporate pension schemes.”
Scottish Widows has also confirmed its long term commitment to the corporate pensions market by announcing it will continue to invest approximately £20m a year in its corporate pensions proposition.
According to a statement issued by the provider, this will enable the company to continually evolve to ensure it is “best placed to service the needs of its customers providing value add corporate pension schemes”.
David Holton, director for corporate propositions at Scottish Widows, said the life and pensions provider will implement a fair and transparent pricing approach, removing costs and hidden charges. He said that, where possible, the company has absorbed the costs.
Mr Holton added: “The announcement provides a clear road to compliance in challenging timeframes that treats customers fairly and is transparent.”
In March 2013, Standard Life switched off trail commission on legacy products for adviser clients, even where a new transaction is non-advised.