GPP- Can the F.A still take commission from pension?

bob_dob

Hi,
Apologies if this is a silly question. In 2011 I had a pension meeting with the financial adviser for my employer and he gave me a suitability report that contained a 'Cost of services' page. In this it states that there were 3 ways in which he could be reminerated:
1. Commission
2. A Fee
3. A combination of fee and commission

Under the latter it states 'This is a combination of the above. The fee would be payable by you and the commission by the recommended provider.
On this occasion we have agreed that I will be remunerated via commission payable by the recommended product provider. The amount of commission payable is highlighted in the illustration provided. For the sake of completeness I have also summarised the commission payable on the products recommended in this report in the table below.
It then shows that his initial commission would be £427 and an annual commission of 0.75% of the monthly contribution from year 3onwards.

Now I never signed this or agreed to it (a number of reasons) so my question is if I now join this pension, would the adviser still be paid commission, bearing in mind the retail distribution review?

JoeCrystal

Two years between the meeting and then deciding to join is too long really. Many things could have changed in that time. Why not have another meeting with updated situations and so on? In my opinion, you should just start again from scratch.

Do you know if the employer is going to pay any contributions into the pension scheme?

Cheers,
Joe

mania112

With a GPP I think taking servicing rights for your plan (to receive ongoing commission) requires the adviser to have servicing rights for everyone in the scheme.

Which wouldn't be possible.

dunstonh

Now I never signed this or agreed to it (a number of reasons) so my question is if I now join this pension, would the adviser still be paid commission, bearing in mind the retail distribution review?

The adviser would still be paid for doing it. How they would be paid will depend on what action the employer and adviser took in 2012 in the lead up to RDR (if any).

bob_dob

Hi all and thank you.
JoeCrystal- Yes my employer will be putting a contribution (3% I think)
Dunstonh- So are you saying that, essentially, things may not have changed. i.e. He would still receive commission even if I signed up 'fresh' so to speak?

sandsy

For new members of existing GPP schemes, advisers can continue to receive commission post-RDR. It's when the entire scheme is moved that the new rules kick in.

JoeCrystal

bob_dob wrote: »

Hi all and thank you.
JoeCrystal- Yes my employer will be putting a contribution (3% I think)

Well, in that case, as sandsy pointed out, if the scheme still pay 0.75% commission, then there is no problem because the employer is paying 3% which is free money. If you move job then I believe it should be simple enough to transfer pension fund to new one?

Cheers,
Joe

bob_dob

bob_dob wrote: »

Hi,
Apologies if this is a silly question. In 2011 I had a pension meeting with the financial adviser for my employer and he gave me a suitability report that contained a 'Cost of services' page. In this it states that there were 3 ways in which he could be reminerated:
1. Commission
2. A Fee
3. A combination of fee and commission

Under the latter it states 'This is a combination of the above. The fee would be payable by you and the commission by the recommended provider.
On this occasion we have agreed that I will be remunerated via commission payable by the recommended product provider.

Thank you for all your help. I take it that the three 'options' he gave me aren't exactly options then?

dunstonh

bob_dob wrote: »

Thank you for all your help. I take it that the three 'options' he gave me aren't exactly options then?

The guide to services document is generic. Not specific. Most of it is pre-determined text.

bob_dob

dunstonh wrote: »

The guide to services document is generic. Not specific. Most of it is pre-determined text.

So it's unlikely he will accept a fee instead of commission?

dunstonh

bob_dob wrote: »

So it's unlikely he will accept a fee instead of commission?

On a group scheme, probably the case as the terms of the group scheme are agreed between employer and adviser.