Scottish Widows RDR charges

SallyG

http://www.scottishwidows.co.uk/about_us/serving_our_customers/rdr_faqs.html

Customer scenario Proposed adviser charge
Standard charge for financial planning advice – new single customer £650
Standard charge for financial planning advice – existing single customer £450
Standard charge for financial planning advice – new joint customers £850
Standard charge for financial planning advice – existing joint customers £600
Additional charge per ISA transfer (from external source) under consideration £100
Additional charge per pension transfer under consideration £150
Additional charge for each pension fund converted into annuity £100
Additional charge per product for Inheritance Tax planning £150
Additional charge for complex retirement planning – annual / lifetime allowance £150
Annual charge for Income Drawdown/Phased Retirement annual reviews £300 pa

RogerA_2

[QUOTE
Customer scenario Proposed adviser charge
Standard charge for financial planning advice – new single customer £650
Standard charge for financial planning advice – existing single customer £450
Standard charge for financial planning advice – new joint customers £850
Standard charge for financial planning advice – existing joint customers £600
Additional charge per ISA transfer (from external source) under consideration £100
Additional charge per pension transfer under consideration £150
Additional charge for each pension fund converted into annuity £100
Additional charge per product for Inheritance Tax planning £150
Additional charge for complex retirement planning – annual / lifetime allowance £150
Annual charge for Income Drawdown/Phased Retirement annual reviews £300 pa[/QUOTE]

Thank you for that Sally.
Now we know who really benefits from the tax relief on pension fund contributions.

Tammer

Hi,

What was the point you were making?

jamesd

So those are the charges SW will make for advice from its team. Now how about the reduced fund charges, that may drop by 0.5 to 0.75% a year as a result of the change? A 0.5% drop is a cost reduction of £500 a year on a £100,000 pot.

Using the SW advisers doesn't seem like a good move because they are only able to advise on SW products.

dunstonh

Using the SW advisers doesn't seem like a good move because they are only able to advise on SW products.

I did a pension last week and SW came out 9th in price on a like for like basis (or almost like for like as it was missing some things which required alternatives to be used). It's not a bad product but personally I feel it has limitations. So, add the SW charges on top, which actually are not unreasonable and in line with what you would expect for a transaction service (although do note that it is possible that VAT would apply to some of those charges as they have structured it like that).

SallyG

This one caught my eye -
"Annual charge for Income Drawdown/Phased Retirement annual reviews £300 pa "-
last summer I had a phone call from the new SW salesman taking over this patch - he introduced himself and asked if everything was OK - there was some banter about the unpredictability of the stockmarket and the fund manager's narcolepsy but I thought a hello phone call was not the right time to go into detail.
A week later I got a letter from SW saying I'd had my annual review and setting out what we'd "discussed" - it didn't mention any charge.
Think I'll ask the SW call centre about it ....................................

dunstonh

As advice moves away from being linked to product to being "advice" then expect events to have letters sent out (or communications by method of choice) confirming things agreed. Or even where no action has been taken.

You cannot be charged for something you have not agreed. You are required to be told of any fees before the work being done takes place. I suspect your case was in that hybrid window where they have the RDR systems in place to record contact but hadnt moved to RDR charging.

SallyG

According to the call centre - didn't seem altogether confident -thought I was talking about IFA charges not SW RDR "sales patter" charges ...... but asserted confidently that charges only apply to new business -
but from the same SW website FAQs :
"Advice has never been free. It's usually been paid for from product charges. However, the new rules mean advice charges for pension and investment products need to be set out and agreed seperately [sic] from the product charges, making things more transparent for you. However you will continue to only be charged if you purchase a product."
Does that mean as an existing customer I will still be charged for annual drawdown "advice" but still covertly from my pension fund?
Still wondering if/how much and when I paid for that ?3 minute phone call/yearly review.

dunstonh

According to the call centre - didn't seem altogether confident -thought I was talking about IFA charges not SW RDR "sales patter" charges ...... but asserted confidently that charges only apply to new business -

looks like their training isnt up to standard. RDR applies to any advice given post RDR. Advice relating to a pre RDR contract comes under RDR. The remuneration method on pre RDR can be used to offset against the RDR fees but it brings a pre RDR contract into the post RDR world.

Does that mean as an existing customer I will still be charged for annual drawdown "advice" but still covertly from my pension fund?

You should be. Although if there is a commission on the product they can use that to offset the fee or replace it with a fee. Most platforms (or contracts with a platform style) have put in place the facility to allow the contract to move from commission to fee. The SW account is effectively fee based anyway and not commission.

SallyG

I asked the callcentre guy to put in writing his confirmation that I won't have to pay £300 for each annual income drawdown review .

SallyG

Tried the callcentre again this time the story is the SW salesperson will have to tell me in advance that I'm about to receive "advice" and agree a price upfront -
are annual income drawdown reviews mandatory?
If I say I don't want one thanks what will happen?