Ad hoc adviser charges for Group Personal Pensions - questions & answers

Click on each question to see the answer.

General questions

Ad hoc adviser charges allow plan holders to make ‘one off’ payments to an adviser from their plan where they have received advice /service that relates to their Royal London pension plan.

As ad hoc charges are not linked to a specific event or process we do not require any information on what service is being provided, we simply facilitate the payment.  The client will need to sign to confirm they are getting additional services not covered by other charges / commission and that this advice / service relates specifically to their Royal London pension plan.

As ad hoc charges are not linked to any other event we cannot illustrate the impact of them alongside any other event, for example an increment.

We already support ad hoc AC from Pension Portfolio plans. From 30 October 2015 we’ll be able to facilitate ad hoc AC payments from all versions of Retirement Solutions Group Personal Pension Plans (both pre- and post-RDR schemes).

We can’t facilitate ad hoc AC payments from Retirement Solutions Group Stakeholder Pension Plans, Retirement Solutions Company Pension Plans and all legacy workplace pensions, such as Talisman Group Pension Plan. 

Ad hoc AC can be specified as:

  • a monetary amount, or
  • a percentage of the plan value.

The charge can then be applied across the whole plan, and taken proportionately from all contributions, or can be targeted against a specific contribution/contribution type (with a few exceptions as described in Q6 below).

There is no limit on the frequency.

We won't need to see evidence of the services being provided, however, the ad hoc AC application form has a declaration the client will need to sign to confirm they are getting additional services not covered by other charges / commission and that this advice / service relates specifically to their Royal London pension plan.

Although we don't need to see evidence of the services being provided, you will need to adhere to your own compliance requirements when documenting the services you’re providing and keeping records of client agreements.

Ad hoc AC payments can't be taken from contributions which had / have an allocation rate of more than 100%. This predominantly affects transfer payments that were increased using our former transfer value enhancement option (TVEO) but could also impact on some contracting out payments and single contributions.

If we get a request for an ad hoc AC payment from an adviser we’ll provide an ad hoc AC illustration for the adviser to use with their client. This can be issued with the ad hoc adviser charge application form.

Once the member and adviser have agreed the ad hoc payment the ad hoc AC form should be completed and signed by the member. Group Customer Service (GCS) won’t accept any other method of instruction.

GCS will check that the amount requested doesn't exceed the maximum permitted, based on the member's plan value and any previous ad hoc AC payments. If the amount exceeds the commercial limit, and this hasn't been authorised by the Pricing team, GCS will notify the adviser that based on the plan value the amount being requested exceeds our limit.  

If the amount is within the limit GCS will key the ad hoc charge. This will then automatically generate plan documents that will be issued to the member confirming the charge has been deducted from their plan.

  1. GCS will first check the plan supports ad hoc AC.
  2. If charge exceeds limit GCS will notify the adviser that the amount requested exceeds our commercial limit.

No. Advisers will need to request an illustration from Group Customer Service.

No. Ad hoc charges are designed to cover the cost of additional or unexpected services, over and above any ongoing services agreed. So we will need to provide a new illustration before each ad hoc charge is deducted and a new (signed) ad hoc instruction will be required each time the charge is to be deducted. 

Clients will not be able to provide an instruction to us in advance, nor would we be able to illustrate the impact of future charges on the plan.

Ad hoc is not a replacement for initial or ongoing adviser charge and cannot be used in place of these options.

No. Ad hoc charges are designed to cover the cost of additional or unexpected services, over and above any services previously agreed. We cannot illustrate the impact of the adviser charge on the new money. 

As we cannot give the adviser or client a document that would help them understand the impact of the increment and ad hoc charge this would never work as a compliant process.

Ad hoc is not a replacement for initial or ongoing adviser charge and cannot be used in place of these options.

No. Ad hoc charges are designed to cover the cost of additional or unexpected services, over and above any ongoing services agreed. So we will need to provide a new illustration before each ad hoc charge is deducted and a new (signed) ad hoc instruction will be required each time the charge is to be deducted.

Forms and literature

To ensure the member understands the impact of the AC being facilitated from their plan we do require them to complete and sign our Ad hoc adviser charge form.

We will not accept any other type of form, letter or client agreement.

Member disclosure

There is an ad hoc AC illustration, which can be provided to the members to show the impact of facilitating the payment from their plan, prior to them agreeing to the charge.

Once the ad hoc AC payment has been agreed and the charge keyed it will trigger a 'change charge' pack to the member which include a plan details document, with a revised projection and a plan certificate.

Annual statements will also show any ad hoc payments paid during the statement period.

Examples of these documents:

Adviser charge options

The options are summarised below:

ProductInitial ACOngoing ACAd hoc AC
RS Group Personal  Pension Plan (pre-RDR)
RS Group Personal  Pension Plan (post-RDR)
RS Group Stakeholder Pension Plan (pre-RDR)
RS Group Stakeholder Pension Plan (post-RDR)
RS Company Pension Plan (pre-RDR)
RS Company Pension Plan (post-RDR)
All legacy workplace pensions, e.g. Talisman GPS
Last updated: 26 Nov 2015

This website is intended for financial advisers only and shouldn't be relied upon by any other person. If you are not an adviser please visit royallondon.com.

The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.