Tied-advice network St James’s Place (SJP) has unveiled its post-retail distribution review (RDR) proposition and adviser charging regime.
The firm will drop a number of products including the SJPI Money Market Bond, stakeholder pensions, Section 32 pensions and a range of offshore open-ended collective investment schemes and the SJP annuity service.
It said these products had not seen high demand from clients or partners and accounted for less than 1% of total new business.
In a note to partners SJP, headed by chief executive David Bellamy (pictured), said adviser charges would be deducted from products.
‘Whilst some advice firms will offer the option for clients to pay advice directly, perhaps by cheque or Direct Debit, we will be facilitating the payment of advice fees by deduction from the product/ investment, as now.
‘If the clients are happy with our advice charges and want to take our advice, then there is nothing else for them to do.’
It said that while today partners receive initial and renewal turnover as remuneration, those will be replaced with initial advice fees (INF) and ongoing advice fees (OAF) and will be funded from the advice charges paid by clients.
A note to partners said: ‘You will be familiar with the fact that the "cost of advice" shown on illustrations today is higher than the 3% INF partners receive due to the Financial Services Authority's commission equivalence rules; and a similar approach will continue post-RDR, although the amounts disclosed reduces slightly.
‘Hence, post-RDR the initial adviser charge disclosed on the services and costs disclosure document and illustration will be at 4.5% (compared to the 5% disclosed today).’
For its third party products, excluding protection, the firm will charge an explicit initial and ongoing charge for advice, facilitated by the product providers on top of their factory gate prices.