Friends Life today announces its approach to the Retail Distribution Review (RDR) and the measures being put in place to secure a smooth transition for intermediaries. Friends Life is committed to keeping its post-RDR proposition as simple and understandable as possible for advisers.
Friends Life has undertaken a rigorous review process so as to offer a range of simple, flexible and easy-to-use fee facilitation options for advisers and their customers. As the market evolves post-RDR, we will continue to develop our propositions, ensuring that they continue to meet the demands of this new world.
Below is a summary of some of the key approaches that are being implemented across the Friends Life divisions:
– Friends Life is focused on a flexible approach to corporate benefits and is developing a toolkit to assist advisers with the new legislation
– We plan to provide a supported facilitated consultancy charging option on group schemes that is fair, transparent and easily understood by employers and employees
– There will be a range of remuneration options on a consultancy charging basis for the Flexible Retirement Account on our corporate wrap platform
– Our new Charging Modeller Tool will enable advisers to assess the potential effects at scheme level
– We will be facilitating a straightforward adviser charging arrangement for some annuities – paid either as a percentage of the fund (after any tax free cash has been taken) or a flat monetary amount
– Fee facilitation will continue to be available for those individual Full SIPP Drawdowns under which we currently offer the facility to pay adviser fees from the SIPP bank account.
– Lifetime Care will launch a fee facilitation service on 1 October 2012, offering illustrations on a nil-commission basis with the option to add an advice charge to the premium
Friends Provident International
We will offer a facilitated adviser charging service on investment products open to new business in the UK, including updated literature and a facilitated adviser charging service.
– The facilitated adviser charging service will be available for Reserve Advance, the Succession Planning Bond and Reserve (for top-ups on policies previously sold in the UK).
– RDR does not affect overseas products
– Individual Protection will continue to offer the existing commission arrangements without change, and will also facilitate an adviser charge agreed by the adviser and client by offering an option on our quotation system where the premium is reduced incrementally to reflect the fee agreed
– For group protection, we will continue to offer commission and support intermediaries who choose to be remunerated by a fee paid for by their clients.
Friends Life also has a large portfolio of other products in its Heritage business. We are reviewing these individually to produce solutions which offer the best outcomes for advisers and their clients. We may add adviser charging to groups of these products in 2013 depending on adviser and customer demand.
Colin Williams, managing director of corporate benefits at Friends Life comments:
“RDR is a landmark moment for the financial services industry and everyone working within it. We are fully supportive of the increased standards and transparency the reforms will bring and we are working to make it as easy as possible for advisers to make the changes required.
“We are focused on making the Friends Life proposition as simple as possible, so as to ensure a smooth transition into the post-RDR world. As such we have developed a flexible approach that we hope will provide advisers with appropriate options for both themselves and their clients.”