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Standard Life enables ‘locked in’ drawdown pricing throughout retirement

11 December 2019

Standard Life has locked down platform charges for clients entering drawdown and also simplified its charging structure.

From next April, advisers will be able to ‘lock in’ the fees their client pays when their percentage rate is at its lowest level, enabling clients who invest with Standard Life’s Wrap platform to benefit from lower fees all the way through retirement, not just at the outset.

It marks a departure from traditional platform fee structures where the rate steps up as a client’s pension pot reduces.

Under the new structure, adviser  firms have the control to lock in charges when they and their clients choose, giving greater certainty of outcome and resulting in “potentially large savings” compared to traditional charging models, the company said.

Noel Butwell, CEO, Standard Life, said: “Most platforms, including wraps, have traditionally operated a model designed to reward savers where fees fall as the client’s pot increases. Unfortunately, this means as clients start to use their savings to fund their retirement, that percentage goes back up as money is withdrawn creating an increasing drag as their pot declines.”

Standard Life also announced plans to reduce its platform fees to create a simplified charging structure for clients. It said the reduction in rate card was designed to make a “real difference” to existing customers. The number of pricing tiers will be reduced from six to four as of April 2020; available to both new and existing clients.

There is also the new option to set a 15 bps flat fee for clients with more than £1 million.

Butwell added: “We take a long term view on our pricing, ensuring fees are set at a sustainable level that aligns our interests with our adviser partners and their clients. This is why, as we see the impact of Pension Freedoms emerging through an ever increasing proportion of clients taking income drawdown, we focused hard on ensuring our new fees addressed the challenges faced by these clients in retirement.

“The pricing review is as a result of continued growth and efficiencies we’ve generated across our platform business and means we’re able to pass on savings in the form of reduced prices for advisers and their clients.”

New and current wrap pricing from Standard Life Wrap

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