The new charge shapes give advisers and their clients more flexibility in determining the level of advice required and how it is paid for.
Until now Aegon’s group Sipp could only be sold on single priced terms, but it can now be set up on any of the four shapes which make up its Flexi-Menu proposition. The Active Member Discount (AMD) shape has proved the most popular shape with the AEGON GPP, which is offered to employees who pay regular contributions, even if they leave the scheme.
Flexi Menu also offers the option of a premium based charge that is applied in the early years of the plan. Combined with the discount for active members, the result aims to offer a very low reduction in yield on the policy for loyal employees, that improves every year that they stay in the scheme. The terms will be exactly the same as for their existing Flexi-Menu GPP, and the same criteria allowing self-investment will also apply. Members will only pay for self-investment if they decide to use it.
Andy Marchant, managing director of corporate pensions at Aegon Scottish Equitable, says: “We still believe commission levels on mono-charged products do not always allow advisers to offer employers and employees the breadth of services and advice they are looking for.”
