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.
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers