The UK-based division of Momentum Pensions Group has made a series of changes to its international self-invested personal pension product.
From 1 January 2020, there will be a minimum acceptance level of £100,000 ($129,285, €117,280) for life-based products.
Momentum Pensions said the move reflects minimum administration fees on these types of products, regardless of pension fund size.
Adviser charges and client fairness
There will also be a capping of commissions on life products at 5%.
The firm said: “Whilst it is industry practice that adviser charges are being agreed between the client and the adviser, Momentum’s approach towards client fairness is reflected in monitoring these charges and their potential impact.”
Additionally, Momentum said it will continue to accept clean share classes only, adding that its updated acceptance criteria will “reinforce the need for all charging periods for any life-based products to be based around the intended retirement age”.
Commission disclosure
Stewart Davies, group chief executive of Momentum Pensions, said: “This move reflects the changes already announced by the life industry in 2019 on commission disclosures, as well as the recent announcement from the UAE’s Insurance Authority in terms of caps on commissions at 4.5%, for life products authorised by the said Authority.
“We trust that these types of remuneration levels are already in place with the majority of the best advisers in the market, who are moving towards a fee-based model.
“Furthermore, it also reinforces the full cost and commission disclosure models in place for the Qrops market, as introduced by the Malta Financial Services Authority in January 2019.”
Davies continued: “We believe these measures will be welcomed by the Financial Conduct Authority and the market in general, and we expect other pension companies to adopt similar measures.”
