THE BIG QUESTION

Will providers dealing direct with employers post-RDR have to disclose the cost of workplace presentations and other services separately from product manufacture costs?

Richard Hobbs, director, Lansons Communications

Adviser and consultancy charging applies to direct and tied sales as much as to the independent channel. The FSA has not just limited the scope of this to advice.

The rules say this disclosure requirement extends to ’providing services to an employer in relation to the provision of group pension schemes’.

That must mean more than just giving advice. So even if you are simply providing information to scheme members, you are subject to the RDR.

That means providers doing so are going to have to find a practical way of disclosing this.

By introducing this requirement the FSA is trying to prevent the creation of a loophole whereby advisers realise they can simply recreate themselves as providers and get undisclosed remuneration. Going direct does not get you out of adviser or consultancy charging.

This stops advisers from getting round the rules, but in doing so it also creates significant complexities for providers dealing direct as well.

And deciding what does and doesn’t get disclosed is going to be very difficult to police.

John Lawson, head of pensions policy, Standard Life

Where providers are doing exactly the same thing as advisers it would be only fair for them to have to separate that out as a separate charge.

But things like marketing costs will come within product costs for providers going direct to market.

It does also give a regulatory imbalance between trust and contract-based schemes as trust-based schemes are not affected by the RDR.

We may see employee benefit consultants hosting schemes on a corporate wrap platform that they own.

By wrapping their own pension wrapper round the scheme they may be able to present themselves as providers.