UK - The stakeholder market will eventually separate into a market for administration systems and a market for the investment of stakeholder assets, according to employee benefits consultancy Gissings.
Rodney Jagelman, director of corporate affairs at Gissings said: A provider with a business plan that doesn’t allow for the administration to stand alone may be doomed to failure. The market will demand two distinct products – efficient administration and sound asset management. Insurers are already breaking apart these two roles. The four or five providers who survive will basically be administrators.
Jagelman believes it is unlikely the government will need to rethink the one percent annual management fee and sees fierce competition on the asset management side driving fees even lower.
It’s more likely that the market will migrate to a flat fee. One percent will be an excessive fee for a successful stakeholder provider.
Many firms are already going lower than 1pc and a flat fee is not an illogical proposition. It will be survival of the fittest.
The registration deadline for the Workplace Savings & Benefits Awards 2019 is today.
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