Standard Life has slated Norwich Union for increasing its commission levels to advisers in respect of Stakeholder pensions, following the allowable charge increase from 1% to 1.5% per annum.
Standard's marketing director said he believed the commission increase was purely to obtain market share from advisers. He also commented that the levels of commission paid would mean virtually no profit margin in the first ten years for the product provider.
Our view
We think that Standard Life has a very short memory when it comes to enticing advisers with commission. It was not so long ago when Stakeholder pensions were first introduced that Standard Life rolled up 10 years worth of commission to pay to advisers at the time the pension was sold. It was only later (and after much business had been obtained) the provider decided the commissions were unsustainable.