Speaking at the Corporate Adviser Summit in the Four Seasons hotel in Hampshire last week, Matthews condemned the practice as both “curious” and unhealthy, while also raising questions about its legitimacy.
In a Q&A session with advisers, Matthews said: “I must say that I think some of us are quite disturbed about the ‘buy-now-while-stocks-last’ activity that appears to be going on in the market place. We have some of our plans which will come under attack because of all sorts of reasons, some of which may be legitimate no doubt, although not necessarily all are.
“It’s curious for me to see the companies that are selected to replace us are inevitably a list of three companies still paying initial commission. I don’t think that’s healthy for the industry and of course we don’t like it at our company”.
Ross Jackson, head of marketing communications for Aegon, rejected the claim, saying such a strategy is neither desirable nor viable.
Jackson said: “I don’t see how that is a viable strategy for companies doing that from a capital point of view. We are trying to move our business towards an RDR-friendly structure over time. We have not moved as quickly as some of our competitors but it is something we are trying to do.”
Nick McMenemy, director of corporate solutions at Towergate Financial London, said advisers were under pressure to deliver the most cost-efficient solution for employers.
“Trevor has made a point about this fire sale on commission. If I offer my clients, who are employers, four virtually identical pension schemes with virtually identical charging structures for members, fund choices, service and online propositions and three of them will allow me to own money on that scheme without charging the company a fee and the fourth one won’t, it’s a relatively easy decision for me to recommend for them the three companies will.”
“If I can save the client money in difficult times now and still give him a better pension – still send people out to talk to his staff, still make sure they are paying a 0.5 per cent annual management charge and still make sure that they are saving for retirement at no cost to him upfront why wouldn’t I do that?”