IFA-Promotion Stakeholder update - Issue 5
Contents
- Introduction
- Comment from David Elms - Chief Executive of IFA Promotion
- Research findings
- Stakeholder win list
- OPRA Registered Stakeholder Pension Scheme Providers
- New Publications/guides
- Stakeholder technology
Welcome to the fifth edition of the IFA Promotion Stakeholder Update produced exclusively for journalists. We’ll produce other updates when there is new information available so we can keep the information relevant, to the point and interesting. For further information or for back copies please contact Pippa Russell, or Shellie Wells on 0207 490 8828 or e-mail on philippar@lansons.com and to remove your name from the distribution list please call Liz Willder at Lansons on 020 7490 8828.
David Elms’ Stakeholder thoughts for today
“Stakeholder pensions are now truly alive and kicking and what teething trouble and red cheeks are we seeing? Even the poor regulator is hitting front page press for getting lost in the stakeholder complexity. Stakeholder advertising looks likely to drop off with only a few big players being able to afford to continue, for example Norwich Union has just committed 7 million to a TV, poster and press marketing campaign.
Although the Stakeholder products are all at first sight similar, there are important distinctions which could make an enormous difference to people’s standard of living in retirement. Fund investment through Stakeholder is now one of the most important choices to be made. Only three providers are offering any kind of with-profits link and each of these choices is different. External fund managers are being brought in to spice up investment performance, and all this against a short-term backdrop of dwindling value pension funds. Who could disagree that salting your hard-earned cash into a Stakeholder requires an IFA’s advice?”
Research findingsResearch shows that Stakeholder consumer awareness is continuing to grow gradually, but will it miss its target audience and serve as a tax break for the middle classes and wealthy?
Issued by | Findings | Available from |
Bacon & Woodrow | - 46% of companies chosen to designate a scheme & half of these had already selected a provider | Bacon & Woodrow |
Co-operative Insurance Services | - 65% of SMEs do not offer employees a company pension scheme. 42% will not be offering a Stakeholder scheme after the deadline in October, even though some will be breaking the law | Co-operative Insurance Services |
Datamonitor | - The number of UK life assurers is likely to shrink from more than 70 to about 20 over the next 10 years because of competitive pressures | Datamonitor |
Department of Trade and Industry (DTI) | - 395,655 employers in the UK have five or more employees | DTI |
Financial Services Authority - Women and Personal Finance | - 27% of married women have pensions compared with 47% of married men | FSA |
Jobs & Money commissioned by the Post Office (Nationwide poll) | - List of excuses not to invest in a pension: | Consignia |
Legal & General - 1000 SMEs | - SMEs provision of benefits 15% private health insurance, 12% healthcare, 7% group life cover | Legal & General |
Stakeholder provider activity publicly announced win list
It is interesting to monitor which providers are enjoying success in acquiring new Stakeholder business and who might take the lion’s share of the schemes. The big players are the predicted winners, with only a handful of Stakeholder providers likely to survive the first couple of years, largely due to a lack of the infrastructure necessary for dealing with Stakeholder pensions cost-effectively.
Provider | Providing Stakeholder scheme for | Potential number of members |
AXA Sun Life | Association of British Travel Agents | 2,500 member firms with approximately 100,000 employees |
AXA to administer Bank of Scotland’s Stakeholder. Initially offered to bank’s business customers and eventually available through branches to private clients. | Approx 4,000 employers | |
Friends Provident | The Heating and Ventilating Contractors’ Association and Electrical Contractors Association | |
Legal & General | The Printing Industry Pension Scheme (PIPS) chose L&G to be sole provider of Stakeholder for their members and all employers in the printing industry | Approx 200,000 employees |
Professional Affinity Group Services | Approx 300,000 members | |
Computer Services and Software Association | Approx 250,000 members | |
National Hairdressers’ Association | Approx 125,000 members | |
Recruitment and Employment Confederation | Approx 72,000 members | |
Forum of Private Business | Approx 50,000 members | |
Stock Exchange Centralised Pension Fund | 400 member companies | |
Powergen | Approx 7,000 employees | |
Association of Optometrists | Approx 6,500 members | |
Spring Group PLC | Approx 2,700 employees | |
Barclays to distribute L&G pension & investment products instead of it’s own. | Possible 250,000 employers | |
Alliance & Leicester to sell L&G savings & insurance products to their customers. | ||
Confetti.co.uk (wedding specialist company) | ||
Marks & Spencer Financial Services | 3 affinity schemes British Healthcare Trade Association, Institute of Export and Radio, Electrical and Television Retailers Association. In talks with another 30 trade associations. | British Healthcare Trade Association approx 17,000 members |
Nationwide Building Society | Mellon Trust, US owned financial services company. | |
Norwich Union | Tesco Personal Finance in talks about providing the retailer’s Stakeholder pensions. | 1.8m customers |
Musicians Union | Approx 33,000 members | |
Carphone Warehouse Group scheme | 3,500 employees | |
Broadcasting Union BECTU | Approx 33,000 members | |
National Union of Journalists | Approx 34,000 members with over 20,000 employed full time | |
Prudential | Trades Union Congress (TUC) with affiliated trade unions: UNISON, transport union T&G, general union GMB, retail workers in USDAW, post and telecoms union CWU etc | Approx 3 million members |
British Chamber of Commerce | 126,000 firms | |
Pearl Assurance | Association of Convenience Stores | 25,000 employers |
Schroders | P&O logistics and transport company and Caparo engineering company | |
Scottish Equitable | The Association of Independent Music (AIM) | |
Scottish Widows | National Pharmaceutical Association (NPA) | 5,000 members with 60,000 employees |
Killick & Co, the stockbroking company has joined up with Scottish Widows for Stakeholder pensions. Being marketed as a pension for children or for secondary savings. | 37,000 clients | |
Standard Life | Post Office - Stakeholder available to general public at up to 18,000 Post Office branches. | Approx 28 million regular post office customers |
The National Association of Volunteer Bureau | ||
The Tilling Association |
Legal & General’s early sales of Stakeholder pensions have been promising with more than 18,000 employers signed up already. Joint ventures with Barclays and Alliance & Leicester have also resulted in keen interest in the product.
Likewise Virgin Direct pensions sales for April were up by 152% on the same period last year. Interestingly nearly 10% of Stakeholders sold were purchased for children and one in three of their new Stakeholder clients are in their 20s.
Britannic Assurance says it has beaten its target of 3,200 for setting up new Stakeholder schemes six months early, and has revised target to 8,000 by October 2001.
Registered Stakeholder Pension Scheme ProvidersCurrently 47 schemes are on the OPRA Stakeholder register:
| Abbey National AIG Life Allied Dunbar AXA B&CE EasyBuild Bank of Scotland Britannic Canada Life Chamber CIS Clerical Medical Deutsche Asset Management Eagle Star Group Friends Provident FPS Halifax Life | HSBC Life Invesco Legal & General Marks & Spencer Merrill Lynch Nationwide Natwest Life NFU Mutual Norwich Union NPI Pearl Police Mutual Prudential Royal & Sun Alliance Royal Liver Royal London | Royal Scottish Assurance Schroder Pensions Scottish Amicable Scottish Equitable Scottish Life Scottish Mutual Scottish Widows Standard Life Teachers Teams TUC Virgin Wesleyan Winterthur Life Stakeholder Winterthur Life Trust Based Stakeholder |
TUC has published a leaflet, Stakeholder Pensions for Women, which explains why women have fewer and smaller pensions than their male counterparts and how Stakeholder pensions could offer them more flexibility. TUC pensions line 0870 8500 500.
Royal & Sun Alliance has produced a Stakeholder education pack containing a series of key fact sheets, from information on basic Stakeholder schemes to an explanation of revised carry back and carry forward rules - 0151 239 4108.
Legal & General has a new consumer booklet covering everything from State pensions through to pensions & divorce 0500 65 65 65.
IFA Promotion has produced an unbiased guide covering Stakeholder, other pension options, levels of contributions required shown against projected returns, the need for advice and where to get it 020 7294 3682. Businesses can also get a list of local IFAs dealing with corporate pensions by calling 0800 085 3251 or visiting www.unbiased.co.uk
Technologywww.stakeholderpensions.com was originally to have been an independent platform for Stakeholder pensions but now Legal & General has become the exclusive provider. The L&G reasoning for this is that many providers could not link to their back office system.
Norwich Union is to offer online Stakeholder pensions, as well as being the first provider to link up with IFA internet portals, AssureWeb and the Exchange.
Synaptic Systems has launched an online service, which enables Stakeholder business to be transacted with Friends Provident, Norwich Union, Clerical Medical, Standard Life and Legal & General. Royal & Sun Alliance, AXA Sun Life, Scottish Provident and Scottish Mutual have said they will join. The EZ New Business service aims to simplify and speed up the application process offering immediate valuation and pre-population.
Co-operative Insurance Services (CIS) is investing 3m in a Stakeholder administration system to provide Stakeholder pensions via multiple channels from Marlborough Stirling. Following a ten month implementation stage, CIS’s direct sales team should now be in a position to process pensions via laptops, while the website accepts on-line applications.
Scottish Life is launching an on-line Stakeholder decision tree, which generates an audit trail automatically for advice given to corporate clients.
Prudential has launched the first dedicated pensions site on digital interactive TV called ‘Pensions First’. Prudential customers and Telewest’s 500,000 digital subscribers can view through the only and property channel. This channel is not currently e-commerce enabled but watch this space.