Skandia Life reveals RDR charging plans

Skandia has announced that products representing 90 per cent of sales and ongoing advice within its pensions range will allow for adviser charging when the new rules come into force in January 2013.

In an outline of its post-RDR charging structure, the provider said transition to adviser charging will cause “minimal disruption” to business and said advisers must only complete the appropriate forms for adviser charging as and when their customers request a top-up after 31 December 2012.

Fund switches within a life or pension product will not trigger adviser charging.

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All key Skandia Life products will allow for adviser charging, with new business going through Skandia Life’s current personal pension, buyout bond and drawdown contract. Some earlier pensions will remain open to top-up business and will later allow adviser charging.

According to the provider, these products make up more than 90 per cent of sales and ongoing advice within Skandia Life.

Skandia Life pensions sold before April 2001 will continue to accept top-ups but will not allow adviser charging. Some older products will no longer accept top-ups.

The company’s Maximum Investment Plan will close to new business and top-ups, with Skandia pointing out that rules on qualifying policies introduced in the last budget have limited the tax advantages of such products which the company said amounts to a “very small” market.

Although closed to new business, the Skandia Life Bond range will continue to accept top-ups, which will not be subject to adviser charging due to low demand. Also, charges would count towards the tax-free 5 per cent withdrawal limit and therefore may not be in the best interest of customers.

Adrian Walker, pension expert at Skandia, said: “Advisers now know what to expect from Skandia, whether it’s through our platform, or through Skandia Life.

“We remain committed to our Skandia Life business range, and are ensuring that the products most in demand from our advisers will be fit for business come R-Day.

“We have focused our resources to ensure we meet the expectations of advisers and customers.”