Fiona Tait, business development manager at Scottish Life
Yes. We suspect some providers will go down that route over the next couple of years. But we and others will not be doing so. We will be sticking to factory-gate pricing.
We hope the FSA will be keeping an eye on this in the way that they have said they will.
But if the issue is whether the employer wants to be paying an up front fee, the question is not one of commission. They will still have this option after 2012 by going down the consultancy charging route. We offer a structure where the advice charges come out of the employer contributions, so the employee need not see their own contributions going to the adviser in the early years.
And if pressure on employers’ budgets is part of the problem, lets not forget the savings that can be made through salary sacrifice.
Advice is valuable and has got to be paid for by somebody. The issue is finding the most efficient way of paying for it.
Tom McPhail, head of pension policy, Hargreaves Lansdown
Yes. There will be IFAs making the most of the limited time they have left at the trough. But pretty soon after 2012 I predict that the providers will start turning off the commission taps.
The FSA has said that they will be allowed to receive commission in relation to existing schemes, for new employees and increments.
But I don’t think providers will fee the need to keep on paying. Providers will say to themselves that these schemes are not going to walk away and so will come to the conclusion pretty quickly that there is no commercial imperative for them to keep on paying this extra commission.
There is still lots of discussion to be had on the way that the Retail Distribution Review and automatic enrolment are bumping into each other.
But I fully expect at least some IFAs to accept what commission is being put their way by some providers for as long as it is on the table.