Drawdown launches come thick and fast

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
Drawdown launches come thick and fast

New drawdown products and pricings have been announced by three different providers, as the industry finally wakes up to expected customer demand from yesterday’s (6 April) pension freedoms.

First up, Parmenion has added new drawdown features to its in-house self-invested personal pension, giving advisers and their clients the flexibility of four different withdrawal options - including lump sum, uncrystallised lump sum, taxable income only and lump sum plus taxable income.

The Parmenion Sipp wrapper carries no additional charge with drawdown to the standard Parmenion portfolio fees.

The firm said its systems have built in intelligence which recognises a client’s age and automatically displays drawdown options only for those aged 55 and above.

It added that if clients have protected lifetime allowance the system adapts to this and can keep track of the remaining lifetime allowance available to a client, even if contributions have been made elsewhere.

Richard Goodall, partner at Parmenion, said: “We are seeing a lot of interest from advisers in our new drawdown flexibilities and in pensions freedom generally. For example, we have over 250 advisers registered already for our series of pension freedom seminars in April and May.”

Meanwhile, Trustnet Direct has introduced new drawdown pricing, with investors are now charged a 0.25 per cent platform fee when building up the pension via a Sipp, capped at £200 per annum.

Alongside this, investors are charged a £96 annual Sipp administration fee and a £10 per transaction fee, or £2 if investing on a monthly basis. Those in phased drawdown are charged as above, plus a flexi-access Sipp fee of £204 per annum.

Trustnet Direct said that a capped drawdown product is also available with slightly higher charges, owing to the legal requirement for a regular pension review.

John Blowers, head of Trustnet Direct said: “We know pension freedoms will make the idea of drawdown ever more popular so we’re keen to ensure that doing so is as cost effective as possible.

“Rather than just applying a single percentage based fee, our transparent charging structure reflects the costs we must meet, providing what we believe is the most fair solution.”

Finally, Jessop Fund Managers has launched a no-fee income drawdown product to meet growing adviser demand for low cost alternatives to annuities.

The firm said that there are none of the charges that are traditionally attached to drawdown products, including those for setting up, transferring funds in or out and making regular withdrawals.

The product has a minimum initial investment of £25,000 and an annual management charge which starts at 0.8 per cent, with a selection of five risk-related portfolios.

Philip Moore, managing director at adviser Action Consulting, said: “The key thing about this product is that it makes it possible for advisers to be able to service a market that they might otherwise struggle with.

“This is particularly the case with clients who are approaching retirement with accumulated pension funds under £100,000.”

ruth.gillbe@ft.com