Responding to Axa’s withdrawal from initial commission for corporate pensions, Aegon says it believes intermediary services should continue to be allowed to be funded through product charges.
Aegon, Norwich Union and Scottish Widows are now the only three remaining life offices paying initial commission on corporate pensions.
Andy Marchant, life & pensions marketing director, Aegon, says: “We continue to be committed to providing solutions to advisers who operate on either a fee or a commission basis.
“Not all employers or employees are able or willing to fund advisory services by fee, and it can be more tax efficient for these to be funded from within the product charges. This is particularly true for small and medium sized businesses.
“We believe that maintaining the facility for intermediary services to be funded by product charges is key to the continued success of workplace pensions. The Retail Distribution Review, and within that Adviser Charging (AC), have the potential to significantly improve the transparency and sustainability in the way in which this is done. However, the details of this are far from clear as yet.”