Legal & General (L&G) has unveiled details of its adviser charging structure for its 150-strong sales force which work in a number of building societies across the UK.
The life company has exclusivity deals with six building societies, meaning their in-house advice service is provided by an L&G adviser who advises on L&G products.
Alongside its deal to provide products for Nationwide’s advice service, these deals give L&G access to around 85% of the UK’s building society assets.
Under the retail distribution review charging structure L&G advisers will only apply advice charges when a client decides to proceed with their recommendation and purchase a product.
There will be 3.5% initial charge and an ongoing annual charge of 0.65% of their portfolio, including sums which have been invested without advice.
Where funds are held on a platform clients will be charged a fee as follows:
- Portfolios up to £10,000: 0.7%
- Between £10,000 and £20,000: 0.35%
- Over £20,000: 0.25%.
The ongoing service for clients includes:
- Proactive contact from a financial adviser at least once a year
- A personal report twice a year, showing a breakdown of investments and performance
- Access to a personal finance website which allows clients to monitor and view their portfolio 24 hours a day, seven days a week.
- Access to the life company’s online benefit website that allows clients access to monitor and improve health and wellbeing.
There will be an additional 0.5% charge each year for clients who buy an L&G’s Select Portfolio Bond, to cover its set up and management.
In November 2012 L&G confirmed single-tied distribution partnerships with Yorkshire, Leeds, Dudley, Tipton & Coseley, Cambridge and Leek building societies, along with Virgin Money. It has access to around 20 million account holders in the UK.
L&G has around 20 partnerships with building societies, which operate a variety of different models including single tied deals, providing advisers, and sitting on multi-tied panels, said Chris Last, L&G managing director of banks and building societies.