Pensions minister Steve Webb has expressed concerns about the way consultancy charges might interact with auto-enrolment.
In a letter to Otto Thoresen, chair of the Association of British Insurers (ABI), he said: “They should only be deducted from an individual’s pot where there is a tangible benefit to that individual. I have received strong representations on this issue, including a number of calls for an outright ban on consultancy charging in qualifying schemes, and the Financial Services Authority has expressed concerns about whether consultancy charging in automatic enrolment schemes will be consistent with its rules. I believe you share my concerns and I want the ABI to help.”
Webb (pictured) also said that his officials are ready to carry out an urgent review of policy and practice in this area, accessing information about the way business involving consultancy charges is being structured by those offering group personal pension (GPP) plans.
“Once I am in possession of the facts, I shall be able to decide whether or not to permit consultancy charges to be levied on automatic enrolment schemes,” added Webb. “I look forward to working with you and your members on this important issue.”
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